At its June 16 meeting, the US Federal Reserve shocked markets when its projections revealed that it expected to raise rates twice in 2023. Previously, the Fed expected to begin its rate hiking cycle in 2024, so the move towards two rate hikes took markets by surprise. Prices of both equities and bonds declined, as markets priced in a more sudden and potentially faster pace of Fed rate hikes. That’s not all. The Fed also increased the interest rate it pays on so called excess reserves (IOER), to 0.15 per cent, effective immediately. This is a subtle but highly significant…

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