U.S. Treasury yields fell on Thursday after the Federal Reserve matched market expectations to deliver a 75 basis point hike to interest rates, its largest since 1994.
The central bank's aggressive move to rein in inflation came after the U.S. consumer price index rose by an annual 8.6% in May, its largest year-on-year increase since 1981.
The move gave a bounce to risk assets, but analysts were divided as to the market implications and the scale of the likely recession coming down the pike. "While some spectators argued for an even steeper hike, the Fed understood that the combination of rate hikes and QT already takes the US into uncharted territory with significant risks to growth. The hike today sent exactly the right message to markets."
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