Fed Chairman Jerome Powell said financial conditions could be tighter than they seem, indicating to some market pros that rate hikes could be coming to an end.
Federal Reserve Chairman Jerome Powell signaled that financial conditions may be tighter than they appear , and market pros took that to mean there could be less rate hiking from the Fed. But it also signaled to markets that the economy could be hit harder by fallout from regional bank worries and tighter financial conditions, as banks restrict lending to businesses and consumers.
Strategists pointed to Powell's comment that financial conditions may have tightened more than it appears in traditional market measures, which would be stocks and bond spreads. That would mean bank lending has contracted more than a reading on financial conditions would imply. "I think what he was trying to do was a separate financial stability from monetarty policy," said James Caron, head of macro for global fixed income at Morgan Stanley Investment Management.
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