How Technology Unsettled the Stock Market

At his coming-out hearing as chairman of the Federal Reserve on Feb. 27, Jay Powell made all sorts of news in finance-land, including a suggestion that the bank saw potentially faster inflation ahead. Also notable was his assessment of the causes for the volatility that roiled Wall Street and saw trillions of dollars lost, gained, lost, and then regained in a matter of days in early February. In wonk speak, Powell remarked that he didn't think that ETFs--exchange-traded funds--were a particular culprit, though he conceded that the issue deserves further study. Powell's reassurance notwithstanding, it is at the least too soon to draw a conclusion. Too much has changed too quickly in the past few years to say with any confidence that we understand the interplay of humans and machines as applied to markets.