Fed's two rate hikes don't faze markets

clock • 3 min read
Andrew Harmstone of Morgan Stanley Investment Management
Image:

Andrew Harmstone of Morgan Stanley Investment Management

This month the Fed surprised by moving its dot plot for 2023 to include two rate hikes - a hawkish divergence from the one rate hike that markets were expecting would be signalled.

This moves forward the timeframe for interest rates to rise, as inflation expectations increase for this year. However, the real surprise was that investors did not react more strongly; while markets did sell off slightly during the week of the release, equities bounced back. Despite the projection: The US 10-year Treasury yield in fact moved down over the month, settling at 1.5% The S&P 500 continued its upward momentum, gaining 2.3% (USD) over the month and reached an all-time high Europe continued its move up with the Euro Stoxx 50 returning 0.7% (EUR) US Services PMIs p...

To continue reading this article...

Join Investment Week

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

More on Markets

Market Movers Blog: S&P 500 slides into bear market

Market Movers Blog: Russia defaults on foreign debt - reports

Latest news and analysis

Investment Week
clock 27 June 2022 • 1 min read
David Kimberley is an investment trusts writer at Kepler & Partners

Opportunity amid madness: Valuations more attractive in wake of panic-driven price drops

Buy opportunities have arisen

David Kimberley
clock 21 June 2022 • 4 min read
The Big Question: Preparing for a bear market

The Big Question: Preparing for a bear market

What are the best strategies?

Investment Week
clock 17 June 2022 • 1 min read
Trustpilot