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Risk appetite slips as the Fed remains on track for tightening
The FOMC meeting last night did very little to change the outlook for rate hikes. However, it was interesting to see that a more hawkish Fed chair (Powell over Yellen) seems to be willing to look past recent market volatility, which did not even get a mention. The slight hawkish tweak to the language on unemployment and nods to what should now amount to a guaranteed rate hike in December (barring a black swan event). Market reaction to the Fed has been to pull back on risk, with the shorter end of the Treasury yield curve to rise and the dollar to strengthen. Furthermore, the announcement has just given the yen ... (full story)