Stocks Down As Traders Assess Fed's Next Move  Image: Bigstock Stocks closed lower again yesterday as inflation and the Fed's next move on rates and their balance sheet come into focus. In yesterday's released FOMC Minutes (from the March 15-16 meeting), it showed that many participants were in favor of a 50 basis point increase at future meetings. (The next meeting is May 3-4.) It also showed that the Fed could be ready to begin reducing their $9 billion balance sheet as early as the next meeting as well. They talked about a cap of $95 billion a month ($60B in Treasuries and $35B in mortgage-backed securities). And they also discussed phasing in that $95 billion per month target over the course of 3 months -- once they get started, that is. Quite frankly, this should be looked at as bullish at best, and neutral at worst, at least in comparison to the excessively high inflation that we're seeing now. The belief is that the economy is not just strong enough to withstand tighter monetary policy, but, according to Fed Chair, Jerome Powell, "flourish in the face of less accommodative monetary policy." The other side of the coin, however, is how much would/could that slow down the economy? But with only one quarter point rate hike on the books, and another half point likely on the way, that's hardly enough to stop this economy. But taking some of the excess out of it, which in turn can help tamp down inflation, could go a long way to help elongate the current economic expansion that we are in. I know the recent volatility can be tough. And I know many are ready to sell when the market goes down, and afraid to buy when it bounces back up. Especially when fear-based headlines can be found at every turn. Sadly, too many let their emotions get the best of them. And we all know what a terrible strategy that is. But it doesn't have to be that way. And mastering your emotions is easier than you think. In fact, there's really only a few things one needs to do to invest with confidence. To learn what they are and how you can apply them to your own trading, be sure to read our latest commentary... Master Your Emotions to Beat the Market
Best,  Kevin Matras
Executive Vice President, Zacks Investment Research | 
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