Frisky Fed

Despite correctly anticipating a quarter-point rise in the Fed Funds rate today, the stock market fell 0.8%, the dollar soared by almost 1% and the 10-yr treasury skyrocketed a tenth-of-a-point to 2.57%, its highest yield since 9/22/14. Why the big moves? The Fed anticipates three quarter-point rate hikes in 2017; the markets were expecting two. Moreover, the tone of the post-meeting statement suggests the outside possibility of a fourth hike.