Interested parties may wish to bore themselves reading the Fed’s May 2, FOMC Policy Statement
Boilerplate Statement
“In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its objectives of maximum employment and 2 percent inflation.”
My Interpretation
- Since the market expected the Fed not to hike, the Fed did not hike.
- Since the market expects the Fed to hike in June, the Fed (wanting to hike), issued statements supportive of a hike in June.
Essentially, the Fed did nothing and said nothing, exactly as expected in this corner.
Mike “Mish” Shedlock
curious syntax, “did not hike, as few expected” would have been better. It does seem like the market was waiting on them, today in typical selloff mode YIELDS COME DOWN. makes we wonder where this thing breaks, assuming interest rates have their own separate reality, and higher rates are putting pressure on stocks? i have their motto engraved over my desk, Reallocate or Die!! and don’t fight the fed.
They need some room to play on the downside.
My Ouija Board has the inside scoop on the Fed…
Tighten until “something” breaks, then go crazy cutting rates and printing money to “fix” what they just broke.
They are following the same script as in the three prior cycles.
Ah well, back to reading my tea leaves…