- Federal Reserve's stranglehold over financial markets is easing.
- Traders are rewarding the strongest companies in the stock market while punishing the weakest.
- Bonds have regained their traditionally negative correlation with equities.
- Cross-asset correlation remains historically elevated but is dropping sharply.
- Stock pickers and 60/40 allocators are calmer.
Bloomberg — Markets — Federal Reserve — Economy — Finance — Investment
The Fed’s Iron-Grip Over Wall Street Trading Is Finally Easing
The Federal Reserve's grip over financial markets loosens as traders focus on the prospect of an economic downturn, resulting in a reduction in-tandem moves between S&P 500 shares and bonds regaining their negative correlation with equities.