- 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.
The Fed’s Iron-Grip Over Wall Street Trading Is Finally Easing
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.
Denitsa Tsekova
