Financial conditions have tightened around 125bp since last year on the strength of the Fed’s forward guidance alone, long before any hikes have even materialised, showing that the markets are indeed highly anticipatory and responsive towards the Fed. On the other hand, many today doubt the responsiveness of the markets and are not even sure whether a series of 25 or 50bp hikes would be enough to tame this particular episode of inflation.
Cut the Fed some slack
Cut the Fed some slack
Cut the Fed some slack
Financial conditions have tightened around 125bp since last year on the strength of the Fed’s forward guidance alone, long before any hikes have even materialised, showing that the markets are indeed highly anticipatory and responsive towards the Fed. On the other hand, many today doubt the responsiveness of the markets and are not even sure whether a series of 25 or 50bp hikes would be enough to tame this particular episode of inflation.