Possible Fed adjustments inject volatility into markets
Ben Bernanke and the Federal Reserve have been conducting a gigantic monetary experiment aimed at reducing unemployment, advancing the economy and reviving the housing market.
Using traditional methods, as well as some that have never been tried on so large a scale, the Fed managed to nudge down a broad range of interest rates to extraordinarily low levels for a very long time. But this past month, Bernanke indicated that the time for winding down the grand experiment might be growing closer.
That has vexed the markets because the Fed’s adjustments have been affecting the wealth and the livelihood of millions of people.
Bond yields had begun rising at least partly in anticipation of Fed action, but they soared after Bernanke explained that if economic conditions kept improving, the central bank might begin to pare down its voracious bond-buying and eventually start to raise short-term rates. His words appeared to spill over into other asset classes as the stock market and gold prices fell sharply and volatility returned to what had been quiet markets.
Last week, after several Fed officials said the markets had overreacted, some of the damage was undone, but not nearly all of it.
"The reaction in the markets has been violent," said Steven Huber, a portfolio manager at T. Rowe Price. "It’s caused a lot of people real pain."
Bond mutual funds, which usually can be counted on for modest if unspectacular gains, have been dipping into negative territory for the year. Some investors have been selling their stakes.
Total recall
About 80,300 Capri track lighting "roundback" style fixtures have been recalled by Mississippi-based Genlyte because they can fall off of the track rail and possibly hit someone under them.
The recall involves Capri track lighting used in commercial buildings and includes 15 styles of metal or polycarbonate light fixtures, accessories and adapters. The track and light fixtures were sold in white, black or silver.
A complete list of catalog numbers and date codes included in the recall is at www.recall.philips.com. The catalog number and date code are printed inside the lighting fixture. "Capri Lighting" is printed on a white label inside the track rail.
They were sold at electrical wholesale supply distributors from August 2010 through January for between $50 and $150. Call Genlyte at 800-375-6007 from 3 to 11 a.m. Hawaii time Monday through Friday; or go online to www.recall.philips.com, choose United States/English and click on the Capri track lighting recall; or email the company at capritrack@philips.com.
