There is very bad news for risky assets in the humiliating policy reversal that a politically compromised US Federal Reserve has had to effect since the November presidential election.
And the clear signal is in the savage price action: the S&P500 Index slumped more than 3 per cent after the Fed’s decision to significantly raise its inflation forecasts, increase its estimate of the so-called neutral (or normal) interest rate, slash by half the number of cuts pencilled in for next year, and its about-face that the balance of inflation risks now lies to the high, rather than the low, side.
Source: https://www.afr.com/markets/equity-markets/the-federal-reserve-s-hawkish-pivot-is-toxic-for-stocks-20241220-p5kzvv