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The Fed Follows Through

March 22, 2017 : Permanent Link

(Harvest) The Federal Reserve (Fed) followed through on its recently hawkish tone Wednesday and increased the federal funds target rate by 25 basis points. This was the second such tightening in three months, but only the third since 2008. Markets, which were expecting more hawkish forward guidance in light of encouraging data trends, interpreted Fed Chair Janet Yellen’s comments as neutral to dovish. Treasury yields rallied in the wake of the announcement and credit spreads resumed compressing.

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