Interest rate policy. It’s caused much of the market’s stomach-churning volatility over the last few weeks. And after last week’s Fed-induced roller coaster ride, investors will get some clarity on what the Fed is going to do. This week will hold the dreaded FOMC meeting and announcement on interest rates. Given the mixed messages recent data has suggested, any clarity, up or down. will be a welcome sign.
However, investors will have to wait for the meeting itself. The amount of data being released this week will be minimal and provide no real direction as to how the Fed will react.
And likewise for earnings. With the markets in-between quarters, not many stocks are reporting their profits/losses, which won’t help investors gauge how the economy is doing or how the Fed will react later in the week.
In the end, the lack of clarity leading up to the Fed’s meeting will only boost volatility. And if the Fed manages to surprise traders, we could be in for a bumpy ride following it, as well.