Stock Market Calm Rekindles Debate Over Fed Tightening

The Federal Reserve’s balance sheet might be insulating Wall Street from the effects of interest-rate policy

The Federal Reserve has pushed back on a notion by some traders that it will cut rates twice later this year to ward off a deep recession. Photo: Alex Wong/Getty Images

For some investors, markets are almost too quiet.

Stocks have regained ground from the beating they took during last year’s interest-rate increases. Volatility has subsided to its lowest levels since 2021. That is despite this year’s hikes, expectations for another 0.25-point increase and worries that turmoil in regional banks will slow lending and contract the economy.

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