On July 27, the U.S. Federal Reserve hiked interest rates for the fourth time this year, raising them by another 75 basis points. What does this tell us about the FOMC and what does it mean for growth?
Fed pivot? We don’t think so
You’d think markets would’ve reacted negatively to such an aggressive policy action from the U.S. Federal Reserve (Fed); instead, equities rallied, the U.S. dollar weakened, the yield curve steepened, and market-based measures of inflation rose. The markets seemed to have zeroed in on the idea that the Fed will take a more data-dependent approach to interest-rate decisions instead of being singularly focused on tamping down inflation at all costs.
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