Yellen Faces a New Conundrum as Financial Conditions Defy Hike

From bloomberg.com

Financial markets are telling Janet Yellen there’s more work to be done -- or else. While the Federal Reserve chair raised interest rates by 25 basis points as expected Wednesday, the outlook was less hawkish than market participants foresaw, with projections for the medium-term tightening cycle largely unchanged. That propelled markets -- judging by the strength of U.S. dollar, bond yields, credit spreads, and stock prices -- to effectively deliver a rate cut to the tune of about 15 basis points, according to indexes published by Morgan Stanley and Goldman Sachs Group Inc. “Our financial conditions index eased ... (full story)