Watch out for the bus! The potential impact of the rate hike and forecast revision from the FOMC is being priced into both bond yields and stock prices, and the adjustment period will likely be fairly rapid. We may see another re-test of the stock market lows in June, which will reverse most all of the portfolio gains this summer.
His message, delivered at a symposium in Jackson Hole Wyoming, was short, concise, and not very sweet. The gist of his speech was that the central bank’s battle against high inflation would last longer than many had previously thought and that interest rates would have to rise higher and stay high until there was meaningful progress bringing down inflation.
