What’s happeningWhat’s driving market The action in bonds didn’t match the volatility seen in stocks ES00 and the U.S. dollar DXY following the Fed’s decision to lift rates by a half-point and issue a dot plot of rate forecasts above expectations. Fed Chair Jerome Powell pushed back on expectations of rate cuts next year.What’s happening What’s driving market The action in bonds didn’t match the volatility seen in stocks ES00 and the U.S.
“Judging by the market reaction, investors either think that economic developments next year will force the Fed to renege on its rate promises or believe these projections were simply a strategy to tighten financial conditions, not seeing them as credible,” said Marios Hadjikyriacos, senior investment analyst at XM.
Both the Bank of England and European Central Bank are due to make their own half-point rate hikes on Thursday. There’s also a big slate of economic data: weekly jobless claims, the Empire and Philadelphia Fed manufacturing indexes, retail sales, industrial production and business inventories.