The markets aren't buying what the Fed is selling
Federal Reserve Board Chairman Jerome Powell looks on during a news conference following the announcement that the Federal Reserve raised interest rates by half a percentage point, at the Federal Reserve Building in Washington, U.S., December 14, 2022. Evelyn Hockstein | Reuters |
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The Fed has a problem in that it says one thing, and the markets want to hear another. "The bottom line is the markets just aren't buying what the Fed is selling," said Diane Swonk, chief economist at KPMG. "That ups the ante on the Fed to go further and be more hawkish." Stocks were sharply lower Thursday, and bond yields retreated as investors considered the hawkish tone of the Fed's message that it will keep rates higher for longer. Markets had flip flopped Wednesday afternoon, after the Federal Reserve released its policy statement and new interest rate and economic forecasts. |
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