Stocks continue month’s downward spiral! Wall Street saw gains reversed to close with -1.6% declines, but this was due to comments by Treasury Secretary Yellen and not the Fed. FOMC hiked 25 bps as expected2023 median dots remain unchanged at 5.125%.
“The Committee anticipates that some additional policy Perhaps firming is appropriate,” rather than “ongoing increases in the target range will be appropriate.”- suggesting less than a 50-50 risk for another quarter point move!
Even though Powell began his press conference reiterating the banking system is “Resilient and sound” and assured the Fed is prepared to use all its tools to keep it safe and sound, Yellen at the same time told lawmakers she wasn’t considering ways to provide broad guarantees Uninsured bank depositors. She assured Senator Joe Manchin that in the event the insurance is extended, it could be seen as a “One-time special assessment” where the cost was not a burden to customers with smaller deposits.
- FX – USDIndex fell on a less hawkish view To 101.54 Treasuries and implied Fed Funds futures rallied upon the policy outcome. It is close to the 101.21 of February 1, which was also the weakest since April 20,22. EUR spiked…
