Stocks and bonds have always responded to the latest economic data releases. But with the Federal Reserve potentially set to hike rates as early as June, the markets’ data dependency could degenerate into a full-out data addiction.
It’s not that investors have suddenly taken a greater interest in the growth rate of the economy. Rather, since the general trend of growth puts the Fed on pace to hike raise, each individual data point is starting to take on a greater import.
Some even suggest that this is by design. That is, the Fed may be creating a deliberate show of tying policy to data, in order to slowly reacquaint the market with volatility after years of quiescent gains.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.