DoubleLine’s Jeff Mayberry and Samuel Lau welcome the first day of summer (June 21) to the Northern Hemisphere with a look back at a mostly red June 14-18 market week. What began as a quiet week was derailed by market reactions to the Federal Reserve’s policy announcements June 16 (starts at 10:17). Jeff and Sam review as the question of the week what didn’t change (the federal funds range and the rate of asset purchases) and what did (the overnight reverse repurchase agreement facility, up from 0 to 5 basis points (bps), and the interest on excess reserves, up from 10 bps to 15 bps). They then break down what these changes could mean going forward, and whether Sam would call these a “plethora” of changes. Jeff and Sam also talk about how changes to the dot plot point to the Fed hiking interest rates earlier than previously expected and note Fed Chair Jerome H. Powell’s testy reaction to reporters’ dot talk. Jeff and Sam note that if interest hikes are coming sooner, taper action could also be coming sooner.
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