why does the stock market often respond after a FOMC meeting when there are no announced...
why does the stock market often respond after a FOMC meeting when there are no announced changes in the target Fed funds rate? Do the bond markets respond also? Would you expect them to respond similarly? Why or why not?
Homework Answers
If the Fed funds rate don't change and there is no further tightening, the stock market usually goes up anticipating that the surplus liquidity would flow into the stock market and thus drive up prices of the stocks.
The bond yields remain the same if the Fed funds rate remain unchanged, then the bond prices would also remain the same and hence the bond market won't react.
Thus there is clearly a difference in the way stock and the bond market reacts to an FOMC meeting.
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why does the stock market often respond after a FOMC meeting
when there are no announced...
why does the stock market often respond after a FOMC meeting when there are no announced...
why does the stock market often respond after a FOMC meeting when there are no announced changes in the target Fed funds rate? Do the bond markets respond also? Would you expect them to respond similarly? Why or why not?
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please help thank you so much
How might you respond in a hypothetical FOMC meeting? Answer the questions below to determine your policy leanings. 1 Would you be more concerned with your cousin losing his/her job or prices increasing faster than your income? Cousin losing job Equally concernedPrices rising Do you agree or disagree with this statement: "Markets do the best job at allocating resources to maximize economic potential and financial market outcomes. Government policy or regulation inhibits this." 2...
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