Courtesy of Mish.
A “dot plot” of Fed-expected rate hikes vs. market-expected rate hikes shows convergence towards the market’s view.
In December, Fed Chair Janet Yellen expected four rate hikes this year. So did various Fed governors.
On March 21, Atlanta Fed president Dennis Lockhart went out on a limb by proposing a hike in April. The market slapped him silly.
For my take on Lockhart’s position, please see GDPNow Forecast Plunges to +0.6%; Tracking Lockhart’s Momentum with Pictures.
Following weak economic reports and Yellen’s speech yesterday, the “dot plot” of expected hikes further converged.
Wall Street is clearly happy with that change. But is it a good thing for the Fed to outsource policy to market expectations?
Market Rallies Around Dovish Fed
I commented yesterday on the market’s reaction to Yellen’s speech. Today mainstream media is on the case.
