Investors vent their frustration over Fed’s balance sheet inertia (FT)

The Federal Reserve is the $7tn gorilla in the financial markets, and investors wish it was willing to throw its weight around a bit more.

The US central bank showed little hesitation in wading into the market during the pandemic panic in March, and investors took comfort from knowing that the Fed and its chairman Jay Powell had their back, but they found his reluctance this week to promise more specific action quite frustrating.

Equities sold off sharply during his press conference on Wednesday, and again on Thursday. Although the Fed promised it would not raise interest rates until inflation had outstripped its 2 per cent target — years away, even if it is lucky — no new guidance came on how it might adapt its balance sheet policy to generate that inflation and aid the US economic recovery...

https://www.ft.com/content/91bd3435-2439-4787-a013-26eade1067bf