Mohamed A. El-Erian , Columnist

Six Things to Know About the Market Reaction to the Fed

The central bank get a confidence boost as it gradually moves beyond data dependency.

March 17, 2017 at 6:00 AM UTC

Mohamed A. El-Erian is a Bloomberg Opinion columnist. A former chief executive officer of Pimco, he is president of Queens’ College, Cambridge; chief economic adviser at Allianz SE; and chair of Gramercy Fund Management. He is author of “The Only Game in Town.”

Change of outlook.
Photographer: Andrew Harrer/Bloomberg

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The markets’ immediate response to the Fed's hike on Wednesday included an impressive run-up in stocks and significantly lower yields on U.S. government bonds. Some market observers hailed the benefits of a “dovish hike” by a “Goldilocks Fed.” Others cautioned against overextrapolating from what was mainly a technically-driven move. In assessing these and other views, here are six things you should know about the drivers of this unusual market reaction and some implications for what may lie ahead.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.