What We're Reading

Most economists surveyed by The Wall Street Journal expected Federal Reserve officials to begin winding down their $4.5 trillion portfolio of bonds and other assets this year.

Nearly 70% of business and academic economists polled in recent days expected the Fed will begin allowing the portfolio, also called the balance sheet, to shrink by allowing securities to mature without reinvesting the proceeds at some point in 2017. Of the economists who expected a shift in the Fed’s balance sheet strategy this year, the majority predicted the process would begin in December.

In last month’s survey, just 22.2% of economists expected the Fed to begin shrinking its portfolio this year. Fewer than a quarter of economists in the latest poll expected the Fed to wait until the first quarter of next year to start to whittle down its portfolio, compared to a third last month.

In recent weeks, Fed officials have said they are discussing plans to start gradually reducing the large bondholdings the central

"The market is not cheap but it is not especially expensive either," writes Laszlo Birinyi, calling for the S&P 500 to take out 1,970 between now and the end of September.

Lackluster economic data, so-so corporate earnings, and blowups in many Internet, social media, and biotech names aren't a concern, but instead a positive.

"The overall market is shrugging off the tech and biotech problems, and that’s important ... [it's] “the last stage of a great bull market. It’s the exuberant phase.”