wallstreetexaminer.com / by Brian Maher •
Auntie Janet pulled it off this week… a 0.25% rate hike this Wednesday.
But the markets saw no evil… and heard no evil. The Dow ripped over 100 points Wednesday alone. It slipped about 20 yesterday. But that’s just noise.
Yet Goldman’s chief economist, Jan Hatzius, said something yesterday we just can’t shake out of our hair…
He says the market completely misinterpreted Yellen’s hike. It wasn’t supposed to be the “dovish surprise” the market took it as.
Someone asked if Hatzius thought that was Yellen’s plan. “No, almost certainly not,” came the reply. More:
We feel quite confident that they were not aiming for a large easing in financial conditions. After all, the primary point of hiking rates is to tighten financial conditions, perhaps not suddenly, but at least gradually over time.