I think the market is betting that the Fed can tighten without breaking the economy. Jobless claims remain strong, while falling oil and Treasury yields are easing inflation and valuation pressure. Tech benefits most if long yields stay contained.
The risk is that this becomes a “good news is bad news” trade again. A resilient labour market gives the Fed room to hike further, and the dot plot still points to another hike this year. For now, investors seem more comfortable with higher rates as long as growth holds and oil keeps cooling.
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