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Real Vision: Finance & Investing

Why Did Markets Rally After a Fed Rate Hike?

Real Vision: Finance & Investing

Real Vision

Business News, Business, Investing, News

4.11.1K Ratings

🗓️ 17 April 2022

⏱️ 40 minutes

🧾️ Download transcript

Summary

Why did global equities stage their biggest rally since November 2020 upon the official launch of a monetary tightening cycle at the March 2022 meeting of the Federal Open Market Committee? Why was this decisive risk-on move in stocks led by the tech sector, as front-end bond yields surged, curves collapsed, and dot plots adjusted? And why are the vast majority of market commentators confused, with no consensus explanation forming for this indiscriminate demand for shares as the Fed finally moves off the zero bound? Weston Nakamura explains the sustained upside in global equity markets in the aftermath of Fed Chair Jerome Powell’s press conference. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Transcript

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0:30.2

Hey everyone, thanks for tuning in to the weekend edition of The Real Vision Daily Briefing.

0:34.9

Here's Weston Nakamura to break down everything you need to know.

0:42.9

Why did equities have their best week year to date or the best rally since November 2020

0:50.5

on a fed lift off of zero rate hike?

0:55.4

Why are equities rallying as bond yields especially at the front end surging?

0:58.9

Yield curves are flattening, some parts of the curve are even inverting.

1:02.2

Why is it doing it on that backdrop?

1:04.7

Why led by tech of all sectors in a surging yield and global policy tightening environment?

1:10.1

And policy tightening, not because of economic strength, but because of central banks that

1:14.8

misreads screaming inflation and are now scrambling to catch up in super delayed defensive

1:20.8

response and doing so with the most like not giving them about taper tantrums urgency.

1:31.6

Maybe like the first time ever since this like interventionist monetary policy became the norm.

1:37.6

And oh yeah, let's not throw away a global supply chain and a state of wreck and for good measure,

1:43.4

let's throw in a war breaking out and escalating amongst the world's greatest military

1:48.3

economic powers happening in the middle of like geographic Europe.

...

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