Skip to content
Subscriber Only

There’s More Than One Reason Traders May Have Disliked the Fed's Message

Federal Reserve Exterior As Fed Keeps September Rate Hike In Focus Amid Strong Economy 
Photographer: Andrew Harrer/Bloomberg

Traders seemed to agree that they didn’t like what they heard from the Federal Reserve at its final meeting for the year, but exactly what caused most offense in markets was less clear.

Stocks dropped and Treasuries rallied after the central bank defied pressure to refrain from raising rates, while investors dialed backed their pricing of the future interest-rate path. Fed officials also maintained a generally upbeat view of the economy even as they trimmed their own projections for future rate increases. Observers offered several possible explanations for the risk-off response in markets.