What the FOMC Decision Could MeanUS financial markets started the week in unpleasant fashion as stocks and Treasury notes sold off rapidly. The Dow has fallen over 800 points intraday; the S&P 500 is likewise down over 3%, or over 20% from its January high, with its transformation into a bear market being actualized. Treasuries briefly experienced a yield curve inversion as the yield on the 2-year note exceeded that of the 10-year note, an indication of impending recession, while yields for both securities reach decade-long highs. Meanwhile, DXY crossed above the 105 level as demand for USD grows before the Federal Open Market Committee’s (FOMC) rate hike decision on Wednesday morning. In preparation for Wednesday’s volatility, let’s discuss what the FOMC decision could mean.
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