Brace For A Hawkish Turn And A Deeper Selloff

The Fed is expected to shift from policy normalization to outright tightening, moving further into restrictive territory in line with Fed Funds futures. That hawkish pivot is likely to pressure equities through higher discount rates and P/E multiple contraction, potentially intensifying the ongoing S&P 500 selloff. The signal is broadly risk-off for duration-sensitive assets and equities.

Analysis

The Fed is expected to shift from policy normalization to outright tightening, moving further into restrictive territory in line with Fed Funds futures. That hawkish pivot is likely to pressure equities through higher discount rates and P/E multiple contraction, potentially intensifying the ongoing S&P 500 selloff. The signal is broadly risk-off for duration-sensitive assets and equities.