{"id":17836,"date":"2021-06-04T07:42:11","date_gmt":"2021-06-04T05:42:11","guid":{"rendered":"https:\/\/bernstein-bank.com\/?p=17836\/"},"modified":"2021-06-04T07:42:11","modified_gmt":"2021-06-04T05:42:11","slug":"the-fed-is-testing-the-reaction-of-the-markets","status":"publish","type":"post","link":"https:\/\/bernstein-bank.com\/en\/the-fed-is-testing-the-reaction-of-the-markets\/","title":{"rendered":"The Fed is testing the reaction of the markets"},"content":{"rendered":"\n\n\n
\n

Gold<\/span>\u00a0 1870,575
\n(0%<\/span>)<\/h4>\n<\/th>\n

\n

EURUSD<\/span>\u00a0 \u00a01,2112
\n(-0,12%<\/span>)<\/h4>\n<\/th>\n

\n

DJIA<\/span>\u00a0 34568
\n(+3,99%<\/span>)<\/h4>\n<\/th>\n

\n

OIL.WTI<\/span>\u00a0 68,875
\n(+12,71%<\/span>)<\/h4>\n<\/th>\n

\n

DAX<\/span>\u00a0 \u00a015635,50
\n(+2,99%<\/span>)<\/h4>\n<\/th>\n<\/tr>\n<\/tbody>\n<\/table>\n

The US Federal Reserve has announced new plans. By the end of 2021, it wants to sell off the corporate bonds it bought at the height of the coronavirus pandemic in 2020 from its balance sheet.<\/p>\n


\nS&P 500<\/strong><\/p>\n

\"S&P<\/p>\n

Of course, these are still small numbers, around $14bn. It is a drop in the bucket compared to the $120bn in government and mortgage bond purchases each month. However, it is worth pointing out the fact. The Fed is about to sell some assets off its balance sheet and remove a small amount of liquidity from the system.
\nAt the time before covid, in the autumn of 2017, the quantitative tightening programme also started with a small amount of $10bn a month. No one was paying attention at all at the time. But by the end of the following year, many were no longer laughing. It is worth remembering the precipitous drop in stock markets in December 2018. After that, the Fed came to its senses and started pumping money into the economy again.
\nThere is still a long way to go now. The Federal Reserve is supposed to announce plans to slow down the printing press in the near future. But judging by the regulator’s actions and rhetoric, this process could be stretched out over time. Most likely, it is being done to pump as much money into the system as possible. In the future it will allow buying government bonds to finance the huge hole in the federal budget.
\nIt is important for traders to remember that a lot will depend on the unemployment data which is released today. Last month the reality was like a nightmare. If the opposite happens now, it will untie the Fed’s hands for more signals about tightening monetary policy.<\/p>\n

11.00 EU retail sales in April
\n14.30 US Unemployment Rate for May
\n14.30 Canadian unemployment rate for May<\/p>\n

\n

Important Notes on This Publication: <\/small><\/p>\n

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.<\/small><\/p>\n","protected":false},"excerpt":{"rendered":"

Gold\u00a0 1870,575 (0%) EURUSD\u00a0 \u00a01,2112 (-0,12%) DJIA\u00a0 34568 (+3,99%) OIL.WTI\u00a0 68,875 (+12,71%) DAX\u00a0 \u00a015635,50 (+2,99%) The US Federal Reserve has announced new plans. By the end of 2021, it wants…<\/p>\n","protected":false},"author":37,"featured_media":17595,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[6],"tags":[],"class_list":["post-17836","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"yoast_head":"\nThe Fed is testing the reaction of the markets | Bernstein Bank<\/title>\n<meta name=\"description\" content=\"The US Federal Reserve has announced new plans.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/bernstein-bank.com\/en\/the-fed-is-testing-the-reaction-of-the-markets\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Fed is testing the reaction of the 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