Monday, March 20, 2017

Risk: "Fed Talk Could Get a Lot More Hawkish Next Week"

We originally had this set to post on Sunday morning but it's possibly pretty important, if for no other reason than giving markets an excuse to do what they were already leaning toward, so here's a repeat performance:
From Barron's Income Investing:

The market’s dovish interpretation of the latest Federal Open Market Committee meeting was likely as much a surprise to Fed officials as it was to investors.

Goldman Sachs economist Jan Hatzius wrote this week:
We feel quite confident that they were not aiming for a large easing in financial conditions. After all, the primary point of hiking rates is to tighten financial conditions, perhaps not suddenly but at least gradually over time.
Hatzius expects the Fed to start walking back some of that dovishness....MORE