Investors watch for clues to Fed action

The stock market tantrum is not really about investors reassessing the economy, geopolitics in Ukraine or even corporate earnings. It’s about a newly engaged Federal Reserve ready to fight inflation – soon. Investors hope for clarity this week.

The central bank’s interest rate setting committee concludes its discussions on Wednesday with a statement on the economy, its current reduction of buying government and mortgage-backed bonds, and a probably vague outlook on its target shortterm interest rate.

The markets have been repricing themselves expecting that first rate hike as soon as March.

All the noise in the stock markets can be quieted with clarity from the Federal Reserve. However, clarity comes with less flexibility than the bank usually reserves for itself.