The Tell: Why the Fed may be less likely to oppose a stock market rally than investors think — ‘unless it gets out of hand’

A new Federal Reserve paper indicates policy makers have a different take on financial conditions than widely assumed. That’s a big deal for stock-market investors, said economists at Evercore ISI, in a Wednesday note.

The paper published on June 30 with the title, “A New Index to Measure U.S. Financial Conditions,” proposes a new index that can be used to gauge broad financial conditions and assess how they relate to future economic growth. The index is “broadly consistent” with the Federal Reserve Board’s economic model,…