Investors are gaining more confidence in the Federal Reserve's inflation-fighting backbone, but uncertainty about how far it will raise interest rates to keep prices in check is likely to cause volatility for stocks and bonds in the weeks ahead.
The U.S. central bank on Wednesday raised rates for the first time since 2023, a widely expected move as it seeks to address persistently above-target inflation, despite repeated public calls by President Donald Trump for rate cuts. Bond yields pulled back on Thursday, after a long run-up which had partly reflected worries over whether the central bank would take action.
