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Investors continue to focus on one thing. And that’s the Federal Reserve. This week they were drawn to the Fed’s annual symposium in Jackson Hole, Wyoming.
While the meeting was being held virtually for the second consecutive year due to the COVID-19 pandemic, the event is seen as a watershed moment for the current market environment. Investors have wrestled with inflation, the potential for higher rates and the tapering of bond purchases for weeks. Now, they may have some sense of a grasp on the Fed’s policy going forward. Throughout the week leading up to Chair Jerome Powell’s speech on Friday, stocks hit new records while still succumbing to periods of volatility.
Measures of manufacturing, consumer, employment, and even the official GDP numbers themselves clocked in at rates lower than expected. These bullish figures were seen as a sign for the Fed to stay the course. Corporate actions also paved the way for bullish price action during the week.
All in all, the Fed dominated the action during the week as traders sent stocks higher – but not without continued volatility.
Be sure to check out our previous Wrap here, when the taper tantrum was a real threat.