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Fed Raises Target Rate by 50 bps, Powell Rules Out 75 bps Hikes for Now

The Fed had its monthly meeting on May 3rd and May 4th.  The market was widely expecting a 50-bps hike despite some murmurs from the hawkish flank. Powell also telegraphed markets could likely expect two more 50-bps hikes. That is what the market got and despite fears of hawkish rhetoric the market got the somewhat dovish surprise of Powell saying that the FOMC is not “actively considering” a 75-bps hike.  The 2-yr yield dropped .13% and the 10-yr dropped .04%, flattening the curve...

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