The iShares MSCI China ETF (MCHI) rose 1.2% and the iShares China Large-Cap ETF (FXI) advanced 1.4%.
After all, the dot curve was unchanged and chairwoman Janet Yellen sounded dovish at her press conference.
After all, the primary point of hiking rates is to tighten financial conditions, perhaps not suddenly but at least gradually over time.
First, in the press conference, Chair Yellen declined the invitation to give much meaning to the word “gradual”; in fact, she noted that “…rates were raised at every meeting starting in mid-2004, and I think people thought that was a gradual pace, measured pace…” although she hastened to add that the committee is not envisaging “anything like that.” Second, the median pace of hikes in 2019 rose to 3½ from 3.
Looking at how financial markets are behaving right now, the Federal Reserve is going to tighten the rein faster than before, says Goldman.