The Fed’s Iron-Grip Over Wall Street Trading Is Finally Easing
- Rates hold less sway with economic growth, earnings in focus
- Barclays finds cross-asset correlations have dropped sharply
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Risky and safe assets alike have hung on every word and deed of Jerome Powell and Co. for more than a year. Now slowly but surely, the Federal Reserve’s stranglehold over financial markets is easing.
With the latest inflation and labor-market data giving monetary officials fresh ammo to pause their aggressive policy-tightening campaign, attention on Wall Street is shifting to the prospect of an economic downturn. That’s spurring traders to reward the strongest companies in the stock market while punishing the weakest — reducing in-tandem moves between S&P 500 shares.