The Fed's About-Face Complete Amid Dissent

PGIM Fixed Income

August 2019

Ellen Gaske, PhD, CFA, Principal and Lead Economist, G10 Economies, Global Macroeconomic Research Team, and Robert Tipp, CFA, Managing Director, Chief Investment Strategist and Head of Global Bonds

The markets were disappointed with the Fed’s 25 bp rate cut on July 31, 2019. Short-term yields rose amid reduced expectations for cuts. However, long rates declined, suggesting that the less-dovish-than-expected Fed could dampen inflation and growth over the long run.

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