The markets interpreted this to mean whatever they wanted to: The stock market thought rates would stay at zero forever, sending stocks into a frenzy. The Treasury market thought rates would rise sooner than expected, sending 10-year Treasuries into a rout. And the junk-bond market had its own interpretation, in line with stocks, not Treasuries, unleashing the sharpest rally since August 16, 2011. It more than filled the hole left behind by Tuesday’s massacre and allowed junk bonds to end the week with a gain. Halleluiah, thank you Fed.
Courtesy Wolf Richter at WolfStreet.com (EconMatters archive HERE)
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