The Federal Reserve Has Not Yet Begun to Taper
Although the market seems to have staged something of a recovery since the January sell-off, there is a very good chance that the worst isn't over for stocks. The big fear gripping Wall Street in January was that the Federal Reserve planned to taper its bond purchases and raise interest rates.
The reversal of the stimulus it had pumped into the market since the pandemic started would likely mean money that had flowed into the stock market would likely flow back out, to be spent or invested elsewhere.
With the market wafting back upward, it might seem like the worst of that fear has passed. There's only one major risk with that sentiment: The Fed has not yet begun to taper. Indeed, it is still expanding its balance sheet, which now sits in the vicinity of $9 trillion. The chart below shows the recent details and trends.
Source Fool.com
