Market volatility continued in June as investors expressed relief that much of the Covid-mandated restrictions had been lifted while simultaneously worrying that the more serious Delta variation could possibly force the population back into quarantine. While the latter caused an occasional plunge in stock prices, the corrections have been short lived as long bond yields have steadily fallen, with the 30-year note below 2.00% at the time of this writing.
The Federal Reserve’s June meeting was viewed as a hawkish shift. A shift in rhetoric only, as the Fed will maintain its current ultra-easy monetary policy for the near future. Recall from the previous FOMC meeting on April 28th, Powell reiterated that they believe the uptick in inflation will prove transitory and they were comfortable with the status quo. When pressed on whether the committee had begun discussions on how taper would be enacted, he responded that they “haven’t even talked about talking about taper.”