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Late last week, the movement of cross assets were on a tear, triggered by more hawkish guidance from the US Federal Reserve, after its latest interest-rate hike projection has been brought forward by one year to 2023, while several Fed officials have pencilled in two projected Fed funds rate hikes before 2023.
To add fuel for the hawkish camp, prominent St Louis Fed president, James Bullard, conveyed his preference for an earlier interest rate hike to start in 2022 to contain higher inflationary pressures, during a media talk show interview on Friday.
The iShares MSCI All Country World Index ETF tumbled -2.15% last Friday. In contrast, the US dollar, represented by the US Dollar Index, has staged its best performance in 12 months, with an accumulated gain of +2.33% over a similar period. On the surface, one may view that a major risk-off scenario has just started, where a significant surge in US dollar strength tends to represent a demand to seek refuge in a safe-haven
No major negative impact from latest hawkish Fed speak, BoE up next
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ETFs Change Indexes More Often Than You Think
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