Federal Reserve: And So It Begins...

None of this changes the immediate outlook for the markets as the notional amount of reduction of the balance sheet is a drop in the ocean compared to the float of the Treasury and MBS markets, but it does symbolize a regime change to which the financial markets will have to adjust. These decisions are not likely to bite at risk assets until the tightening cycle impedes the economy and crimps corporate profit estimates enough to stretch forward multiples to unsustainable levels.

K. Sean Clark is the Chief Investment Officer at Clark Capital Management, which is a participant in the ETF Strategist Channel


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