U.S. Stocks Jump While Bonds Drop as Markets Calmed by Rate Path
- After 25 basis-point hike, Yellen stresses gradual approach
- Ten-year Treasury yields fail to break last month's high
Fed Raises Interest Rates, First Time in Nearly a Decade
So far, so good. That’s what Federal Reserve Chair Janet Yellen must be thinking after watching the reaction in markets to the central bank’s first interest-rate increase in more than a decade.
Rather than marking a turning point for investors, the mood was one of relative calm. Stocks built on gains from earlier in the session, the dollar advanced versus half of its major peers, and even emerging-market assets climbed with junk bonds. While Treasuries fell, yields on the benchmark 10-year note failed to rise above levels seen earlier this month, suggesting borrowing costs will be contained. Indications future rate hikes will come at a gradual pace supported gold as expectations for equity volatility slid.