Friday 28th January 2022There has been quite a turnaround after the sharp falls in share prices and the rise in bond yields that we saw kicking off during the Jerome Powell press conference after the FOMC yesterday. Today, bond yields have been falling and shares attempted a climb back. So, given the Fed delivered exactly what was expected, why the strong market reaction. NAB’s Gavin Friend says markets were surprised by the hawkishness of the conference, but have perhaps since evaluated the vagueness of what was said. There was no timeline or detail on the number of rate hikes, for example. Today’s GDP numbers for Europe will provide evidence of the sharp contrast with the US, but that is expected to narrow as the year progresses.

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