A hawkish Fed knocked equities and gold lower for only a few hours, and both recovered their losses before the session was out.
Fawad Razaqzada, StoneX Media Market Analyst, explains why equity markets are absorbing a tighter policy signal instead of buckling under it.
Higher bond yields normally squeeze equity valuations, yet valuations are only half of the equation, and growing corporate profits can offset much of that pressure. Falling oil prices pulled bond yields lower alongside them. The risk is the combination that breaks the arrangement, weaker economic data while oil stays elevated, when stagflation concerns return.
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