Bloomberg Surveillance · Thursday, September 24, 2026
Feedback from markets indicates tighter financial conditions through a flattening yield curve and a strengthening dollar, suggesting the Fed's actions are having an impact. However, risk markets have not yet shown significant cracks, leaving uncertainty about the exact threshold for affecting risk appetite.
“The short answer in risk markets is no. Where you are getting feedback is in rates markets, so the yield curve is flattening out. Real rates are going up, so this is not a break-even story. That shows you that you are putting the brakes through the rates market, and the dollar is starting to strengthen as well.”
“So those are first steps in the feedback. A crack in risk markets, you can't really engineer that. You probably don't want to engineer it, but you do want to see tighter financial conditions.”
“It has not affected risk appetite so far. We just never know exactly where that threshold is. But I think we're moving in that direction, absolutely.”