{"id":40034,"date":"2018-11-01T14:58:25","date_gmt":"2018-11-01T19:58:25","guid":{"rendered":"http:\/\/olduvai.ca\/?p=40034"},"modified":"2018-11-01T14:58:25","modified_gmt":"2018-11-01T19:58:25","slug":"expect-the-fed-to-pause-if-volatility-continues","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=40034","title":{"rendered":"Expect the Fed to Pause if Volatility Continues"},"content":{"rendered":"
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Expect the Fed to Pause if Volatility Continues<\/a><\/h3>\n

It\u2019s a good thing October is coming to an end. It\u2019s been a particularly lousy month for the markets. October has seen about $5 trillion in value erased from global markets.<\/p>\n

Reasons for that sell-off range from fear over Fed rate hikes, trade wars, elections and buyback \u201cblackout\u201d periods during earnings.<\/p>\n

Buyback blackouts are ending, which should provide markets some needed lift over the next month. Buybacks have been one of the primary reasons markets have risen this year.<\/p>\n

But other areas will keep the level of volatility high into the year-end. The upcoming elections, for example, could reshape Congress. If there is a turnover from Republicans to Democrats, legislation that relates to tax policy, financial regulations and international relations could be stalled or reversed.<\/p>\n

Externally, we\u2019re facing global volatility factors that include increasing uncertainty over what Brexit will look like and how it will impact the European economy. The new election of a Trump-like populist figure<\/a> in Brazil could have ramifications for trade in the Americas and Asia. Emerging-market countries are also seeing their currencies falter against the dollar.<\/p>\n

Volatility is nothing new. It\u2019s how you deal with it that matters.<\/p>\n

In early 2016, just after the Fed first raised rates in December 2015 after eight years of zero interest rate policy, the markets took a nosedive. As a result, the Fed put the brakes on hiking rates for an entire year.<\/p>\n

Meanwhile, the European Central Bank (ECB) and the Bank of Japan (BOJ) ramped up their asset-buying programs, which provided stimulus to the financial markets.<\/p>\n

All of that led to calmer markets. Investors believed easy money would continue. That\u2019s why we saw the Dow Jones industrial average rise over 60% through this September from where it was in January 2016.<\/p>\n

But now the markets have fallen out of bed.<\/p>\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Expect the Fed to Pause if Volatility Continues It\u2019s a good thing October is coming to an end. It\u2019s been a particularly lousy month for the markets. October has seen about $5 trillion in value erased from global markets. Reasons for that sell-off range from fear over Fed rate hikes, trade wars, elections and buyback […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[57,85,124,11023,233,282,303,1849,431,534,575,8948,3650,2773],"class_list":["post-40034","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bank-of-japan","tag-boj","tag-central-banks","tag-daily-reckoning","tag-ecb","tag-european-central-bank","tag-fed","tag-financial-markets","tag-interest-rates","tag-monetary-policy","tag-nomi-prins","tag-share-buybacks","tag-us-federal-reserve","tag-volatility"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/40034","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=40034"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/40034\/revisions"}],"predecessor-version":[{"id":40035,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/40034\/revisions\/40035"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=40034"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=40034"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=40034"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}