Economic policy

The market will need the Fed again in 2020

Illustration of a needle injecting money
Illustration: Aïda Amer/Axios

The No.1 risk to the stock market continuing its outperformance next year is not President Trump or consistently weak U.S. economic data or even China, senior analysts at John Hancock Investment Management say, but whether or not the Fed continues to stimulate the economy through what they call "not QE."

What it means: Fed chair Jerome Powell has insisted the central bank's bond buying program — initiated after rates in the systemically important repo market spiked to five times their normal level in September — is not quantitative easing.

Federal Reserve Chairman Jerome Powell's last word

Jerome Powel before Congress on Nov. 14. Photo: Tom Williams/CQ-Roll Call, Inc via Getty Images

Fed chair Jerome Powell said the Fed’s monetary policy stance is appropriate, for now, though he noted in a speech Monday night the central bank is not on a “preset course.”

Why it matters: It was Powell's final public remarks — and the last opportunity to recalibrate market expectations — before the Fed enters its "quiet period" ahead of the next interest rate decision.