Fed Back on Inflation Watch and Risk Premia Shoot Higher

The Fed realigns its focus on inflation, causing major shifts in rate cut expectations...

Highlights

• The Fed realigns its focus on inflation, causing major shifts in rate cut expectations...

• ... and triggering a selloff across risk assets

• Economic growth has been focused in the consumer and government

• Stretched valuations and lofty expectations make for an unappealing risk/reward backdrop

Key Takeaways

Fed Statement Sparks Market Volatility

• Before the Fed press statement yesterday, the stock market was doing just fine. After the announcement, there was a swing to the red but nothing too dramatic. And then Powell pontificated and was so all over the map that it is no wonder the major averages tanked.