Literally every asset class (but US dollars) has been falling since yesterday’s FOMC announcement. This shows how far things have been driven by excess liquidity – not fundamentals.
In my humble opinion, the US bond market is overreacting to the announcement and has this one wrong, creating an opportunity. I think intermediate bonds offer nice value here so I increased the duration on bond holdings to pick-up the extra yield (moved money from short-term bonds to intermediate-term bonds).
Stocks are actually in the middle of a textbook correction that could last another week or so. Next week’s market action should tell us a lot about how things will play out over the next few months.
Nick