Markets hang on the Fed’s every word

THE US stock market is stuck, and strategists say it’s likely to remain that way as the Federal Reserve awaits clear signals on inflation and, in turn, everyone else awaits clear signals from the Fed.

Major indices had one of their biggest January jumps in history on hopes of moderating inflation, but gave back roughly half those gains in February as such hopes faded. As March begins, the Dow Jones Industrial Average is roughly 10 per cent above October lows. The new bull market is mired in a debate over whether the Fed can eradicate inflation without bringing on a major recession.

 After two years of rising prices and one of the swiftest rate-hike campaigns on record, “inflation is still a big problem”, said economists at Bank of America Global Research.