, Columnist
Market Signals Just Aren't What They Used to Be
What happens when investors become passive and the Fed trusts markets over models? We're about to find out.
Financial markets are no longer just a barometer. Now they can cause storms.
Photographer: Charles Pertwee/BloombergThis article is for subscribers only.
Financial markets are no longer just a barometer. Now they can cause storms.
We can see two reasons that this happened: Active investors switched to autopilot, and economic regulators became followers rather than leaders. We can also see two outcomes: perverting the function of markets and creating new uncertainties in the economy.