Wall St. Week Ahead: Investors will look to Fed to ease volatility
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Stock investors eager to hear from the Federal Reserve about its plans for continuing economic stimulus may get some soothing words from the U.S. central bank next week.
The Fed is unlikely to tip its hand about when it may begin to scale back its bond-buying program, but policymakers still may be inclined to try to tamp down recent volatility in financial markets with some mention of the issue.
The rally in stocks stumbled and Treasury bond yields rose to 14-month highs following Chairman Ben Bernanke's comments that the Fed may decide to begin scaling back its quantitative easing in the next few policy meetings if the economy improves.
As part of its quantitative easing policy, adopted more than four years ago, the Fed has been buying Treasury and other bonds each month to keep interest rates low and promote growth.
Interpreting Bernanke's words and recent signs about the economy have roiled markets since then. The Dow industrials climbed 200 points in eight of the 17 sessions since Bernanke's comments, and its daily average swing has been 191.5 points.
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