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June 18, 2021 @ 07:55 +03:00
Hedge fund legend David Tepper thinks the Federal Reserve did a good job, showing that policymakers are not asleep at the wheel. The Appaloosa chief, known for bold calls and strong returns, told CNBC’s Scott Wapner on Thursday that despite the Fed’s plan to move up its interest rate hike timetable, the stock market remains alright. “I think the stock market is still fine for now,” Tepper told Wapner.
Tepper thinks the Fed probably won’t start tapering its quantitative easing bond buying program until later this year, telling Wapner that when it happens it will be a good sign that the economy is in a really good spot. Many investors and traders fear that when the Fed does cut back on QE, the stock market will decline, believing that such a move will be the start of central bank tightening, with interest rate increases not far behind.
Dow futures dropped modestly Thursday and then traded slightly lower at the open, one day after the 30-stock average closed off 265 points, or nearly 0.8%, as the Fed indicated two rate hikes in 2023. In March, they had expected no rates increases until at least 2024. As expected, the Fed also left rates unchanged at near 0% levels and made no mention of adjusting the central bank’s massive Covid-era bond-buying program.
Fed critics have been saying that policymakers are not acting quickly enough to stamp out rising inflation in an economy that’s recovering so strongly from the depths of the Covid pandemic.
Billionaire investor David Tepper says ‘the stock market is still fine’ after Fed announcements, CNBC, Jun 18