Tuesday 15 June 2021

Markets rise, investors on Fed watch

Markets rose on Monday.

The S&P 500 rose 0.2 percent to another record high, the STOXX Europe 600 rose 0.2 percent and the Nikkei 225 rose 0.7 percent.

Paul Tudor Jones, founder and chief investment officer of Tudor Investment, told CNBC on Monday that the Federal Reserve's announced stance at its monetary policy meeting this week may have a major impact on markets.

Jones said that if the Fed treats the inflation numbers “with nonchalance, I think it’s just a green light to bet heavily on every inflation trade”.

“I’d probably buy commodities, buy crypto, buy gold,” added Jones.

However, Jones said that if the Fed talks about the possibility of having or getting close to its goals, “then you’re going to get a taper tantrum”.

Indeed, JPMorgan Chase appears to be betting on the latter, at least at some point in the near future.

JPMorgan CEO Jamie Dimon said at a conference on Monday that the bank has been “effectively stockpiling” cash rather than using it to buy Treasuries or other investments because of the possibility that higher inflation will force the Fed to boost interest rates.

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