From Barron's Income Investing:
The market reaction Wednesday to the Federal Reserve’s rate hike was a big surprise, even if the rate cut itself was not....MORE
Stocks climbed and Treasury yields fell sharply. The five-year note, which is most sensitive to Fed prospects, dropped 11 basis points to a yield of 2.02%, according to Tradeweb. The yield on the benchmark 10-year note fell 10 basis points to 2.51% within an hour of the release.
Goldman Sachs economist Jan Hatzius said his team’s research found the market reacted as if the Fed had cut rates — not hiked them. He wrote following the meeting:
The direction makes sense, but the magnitude greatly surprised us… Our factor model for discerning monetary policy surprises from the co-movement of different asset prices scored today’s price action as the third-biggest dovish surprise at an FOMC meeting since 2000, at least outside the financial crisis…
Why the Markets Responded As They Did To The Fed's Rate Hike
"Economists React: ‘An Opportunistic Federal Reserve Raises Rates’"