Quote:
Originally Posted by TwistedChief
Fed was dovish. The market has spent the last 6 months pricing rate increases sooner and sooner and then when it could no longer do that in proceeded to price them larger and larger. The Fed essentially took 75bp hikes off the table which is as dovish as they've been since last fall. That's the good news for equities as the Fed is less likely to prematurely choke off the recovery.
The bad news may be that inflation all else equal will be set to run higher and longer end yields could potentially shift higher as a result (the next week is a gauntlet of events that might push that way). Typically higher long end yields are bad for sectors like tech.
That's all I've got.
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They got really nervous with the negative GDP number... I think they decided it is better to have inflation with any positive GDP for the next quarter compared to having stagflation. In my opinion, neither option is very palatable. It will be an interesting 6 months with tons of uncertainty. Many folks have never seen 5% mortgage let alone 7%+ of the 10 year and up shift higher.