Sawyer Capital ManagementMonetary Policy & Mutual Fund Flows – Sawyer Capital Management https://www.sawcap.com Evolutionize Web Site Tue, 14 Nov 2017 19:30:19 +0000 en-US hourly 1 https://wordpress.org/?v=5.1.22 Monetary Policy & Mutual Fund Flows https://www.sawcap.com/2016/10/03/monetary-policy-mutual-fund-flows/ https://www.sawcap.com/2016/10/03/monetary-policy-mutual-fund-flows/#respond Mon, 03 Oct 2016 09:00:23 +0000 http://evolvemypractice.com/?p=3145 The Federal Open Market Committee (FOMC) of the Federal Reserve sets a target for the federal funds rate (FFR) in an effort to influence the money supply, and in turn the broader economy. This, along with more uncommon actions like quantitative easing, is monetary policy. In a world of efficient markets, all known information is...

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]]> The Federal Open Market Committee (FOMC) of the Federal Reserve sets a target for the federal funds rate (FFR) in an effort to influence the money supply, and in turn the broader economy. This, along with more uncommon actions like quantitative easing, is monetary policy.

In a world of efficient markets, all known information is reflected in securities’ prices. Because monetary policy decisions reflect an economic outlook, market participants price anticipated FOMC moves before they occur. But the FOMC can act in a way contrary to the priced expectations; this is referred to as a monetary policy surprise.

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