Financial markets remain on edge as investors worry about the Federal Reserve pulling back on its bond purchases and what it will mean for stocks and bonds. Wild gyrations in overseas markets like Japan only have added to the volatility in recent weeks.
But Fed tapering fears may be overdone at this point, say strategists, given the U.S. employment and inflation pictures.
Since the 2013 low in Treasury rates on May 3, markets have begun to expect a sooner end to easy Fed monetary policy due in large part to strong April payrolls data and dovish Fed members suggesting stronger economic data could lead to a tapering of asset purchases as soon as September, according to a presentation by ING Investment Management.
But while some are expecting the Fed to start withdrawing stimulus as early as this fall, ING anticipates the Fed will continue its asset purchases until mid-2014.