Viewpoint – February 2023

After a benign three months, February proved to be altogether more challenging. Bond markets suffered a big sell-off as the market substantially repriced interest rate expectations in line with the Fed’s view. At the beginning of the month the Fed raised the Fed Funds rate by 25bps as expected, to 4.5-4.75%, and, while signalling further rises ahead, the accompanying statement was interpreted as somewhat dovish.