SHORT ANSWER
The core idea
Markets can rally after a rate hike when the increase was already expected and the accompanying guidance is less restrictive than investors feared.
THE MECHANISM
What is happening underneath
Asset prices respond to the difference between reality and expectations, not simply to whether a rate went up or down.
MARKET INTERPRETATION
How investors should read it
A hike can therefore coincide with falling yields or tighter credit spreads if the future path is repriced lower.
BONDSTATS TAKEAWAY
The same market move can carry different information depending on which maturity, issuer and risk premium is changing. Read the question together with the underlying concepts rather than treating one price move as a universal signal.
RELATED CONCEPTS
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