Stocks, Dollar, & Bond Yields Sink After Fed Warns “Tighter Monetary Policy Than Otherwise Is Warranted”
by Tyler Durden
ZeroHedge.com
Aug 16, 2017
The initial reactions wre modest but directionally ‘correct’ given the dovish bias to the Fed Minutes – stocks are up, bonds are up (lower in yield), and the dollar is down. But then traders read the warnings that due to excessively easy financial conditions, “a tighter monetary policy than otherwise was warranted.” and stocks sank.
There were 3 dovish quotes:
1. “Many participants, however, saw some likelihood that inflation might remain below 2 percent for longer than they currently expected, and several indicated that the risks to the inflation outlook could be tilted to the downside.”
2. “Participants agreed that a fall in longer-term inflation expectations would be undesirable, but they differed in their assessments of whether inflation expectations were well anchored.”
3. “Most Fed officials saw wage-price framework still valid”
And bonds and the dollar were following that bias…
The Rest…HERE
