Market Extra: What ‘Fed drift’ says about how the stock market behaves around policy meetings

Stocks remained on the upswing Tuesday as the Federal Reserve began a two-day meeting — and bulls might want to give credit to the “Fed drift.”

In a note, Nicholas Colas, co-founder of DataTrek Research, reminded clients of the phenomenon studied by New York Federal Reserve Bank. They found that equities have tended to rally into and through meetings of the Fed’s rate-setting Federal Open Market Committee.

Tuesday “is Day 1 of the Fed Drift sequence, and in an evermore algorithmic world that’s important to know,” Colas wrote, referring to pattern-based trading programs.

Read:Here are 3 things to watch when the Fed unveils its latest dot plot

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