Fed Faces Balancing Act With Markets as Rate Hikes Loom
-
The Fed is expected to maintain a tightening bias and show the market it could tighten policy further if needed.
-
There is a tug of war between Fed rhetoric, data, tightening financial conditions, and bond market moves.
-
It's unclear if further USD gains will come unless the Fed opens the door to more hikes.
-
Markets may struggle to determine how aggressive the Fed will be based on mixed signals.
-
The bar is rising for the Fed to generate a hawkish market reaction.