
As we discussed in our previous post, the market perceived the Fed’s recent comments as less hawkish, implying a reduced likelihood of further tightening. This interpretation suggests that the Fed might be unofficially shifting towards a more dovish stance, favoring the maintenance of current rates. This perception has rejuvenated risk assets, including global equity markets and the Canadian dollar. In essence, stable interest rates imply that long-term bond yields will decrease, making riskier assets a more attractive investment opportunity.