Since the beginning of the noise about the change in monetary policy, the market has been subject to news that could disrupt market sentiment, especially after it became clear that the Fed was behind the curve of the game against inflation, with rhetoric of leaving to run developments without flexible intervention and more consistent with the needs that an economy in the adaptation phase needed, in order not to derail in a scenario of unsustainability.
And after the change of pace that came out of the US central bank meeting in December, with an accelerated reduction in asset purchases, the minutes of the meeting showed that the Fed members were much more aggressive in trying to control inflation, namely by putting forward the possibility of anticipating interest rate hikes and something that had not yet appeared in the noise on the subject, the reduction of the central bank’s balance sheet, putting in practice the Fed’s mentality on a markedly hawkish path, which caused no great surprise investor accounts turmoil, significantly raising interest rates on US sovereign debt, thus dampening interest in the technology sector, at least in the short term.
It remains to be seen whether the corrective movement is to continue or if it is just a short-lived episode, as it occurred in 2021, with the US dollar‘s reaction more contained than expected.
