How Fed decisions, from rate moves to balance sheet policy, actually move markets, and where the obvious read is often wrong.
SVB Financial went from a routine capital raise to FDIC receivership in three trading days in March 2023, one of the fastest bank runs on record.
The Fed's 1994 hikes drove one of the worst bond selloffs on record, exposing a leveraged county treasury and pressuring Mexico's fragile peso peg.
Stocks neared a bear market by Christmas Eve 2018 after a hawkish Fed statement, then rallied hard once Powell signaled a more patient approach in January.
China's September 2024 monetary package surprised markets and stocks rallied hard. November's debt package landed against steeper expectations and fell flat.
The 2013 taper tantrum was dominated by Treasury yields and emerging-market currency pressure, while US credit spreads and the VIX moved surprisingly little.
Central banks move markets with words well before they move policy rates. Forward guidance is a distinct tool from the rate decision, with its own mechanics.
"Priced in" isn't wrong as a concept, but it's routinely misapplied. What the phrase actually claims, and how to check whether it holds.
QE and QT change the amount and duration of assets held by the public and can alter term premia, reserves, and financial conditions even when the policy rate is unchanged.
Bad economic news sometimes sends stocks up, not down. The reason isn't that investors like weak data, it's what weak data implies about policy.
The Fed sets the short end of the curve directly. Government borrowing, auction demand, and term premium drive long yields through a separate set of forces.
Emerging-market central banks don't just follow the Fed's lead. When they diverge, the reasons and the market consequences differ case by case.
A large stimulus headline doesn't guarantee a rally, and a modest one doesn't guarantee a selloff. What markets actually price is composition, not size.
The inverted yield curve has a strong recession track record and a lag time that undercuts most of its popular use. Both facts are true at once, and both matter.
The dollar is supposed to trade on interest rate differentials. It also trades on fear, on crises thousands of miles away, and on itself.
A Fed decision that differs from what markets priced in moves more than rates. Here's how surprises ripple through stocks, bonds, and the dollar.
Two yield curves can steepen by the same amount and mean almost opposite things. The direction of the move, not just the shape, is what matters.
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