Jean Boivin, head of the BlackRock Investment Institute, said in a note that
markets may be overreading language from Fed chair Kevin Warsh's post-meeting
press conference. He said the Fed's decision to raise rates helps establish the
new chair's credibility and that the conference's emphasis on the strength of
the U.S. economy was widely interpreted as a hawkish signal. Boivin added that
with strong growth, rate hikes are not necessarily bad for risk assets and that
defending Fed credibility should be distinguished from starting a sustained
tightening cycle.
