The recent stock rally and mildly encouraging economic data have investors feeling a little braver.
In their views on the market, investors are looking for better conditions than what has persisted since mid-2015. As for the ensuing actions the Fed might take on monetary policy, the view is now tilting back toward additional rate action this year.
Owing to a number of factors, the S&P 500 tumbled more than 13 percent from its mid-July peak to what could be a durable bottom established Feb. 11. Since then, the index has jumped more than 9 percent, with Tuesday's monster rally fed by a modest increase in a key manufacturing index. (The market sustained a mild pullback Wednesday.)
During the period, professional investors have gotten a lot more confident. In the most recent Investors Intelligence survey, which polls newsletter editors, bulls topped bears by a margin of 36.4 percent to 34.3 percent. It was the first time the bulls prevailed in seven months. Just a month ago, bullishness was at 24.7 percent, a level even lower than March 2009, just before the bull market began.
Not surprisingly, that's changed the outlook regarding Fed policy moves.