http://www.businessoffinance.com/sni...-open-for-hike
Here are some bulletin headlines from the April FOMC event immediately after the statement's release:
- FED REMOVES REFERENCE TO GLOBAL EVENTS POSING RISKS TO OUTLOOK
- FED SAYS LABOR MARKET IMPROVED EVEN AMID SIGNS OF SLOWER GROWTH
- FED REPEATS ECONOMIC SITUATION WARRANTS ONLY GRADUAL RATE HIKES
- FED SAYS HOUSING SECTOR IMPROVED FURTHER SINCE START OF YEAR
- FED TO WATCH INFLATION, GLOBAL, FINANCIAL DEVELOPMENTS CLOSELY
- FED: INFLATION BELOW TARGET DUE TO CHEAPER NON-ENERGY IMPORTS
- FED SEES MODERATE GROWTH, STRENGTHENING LABOR MARKET AHEAD
- FED REPEATS ECONOMIC SITUATION WARRANTS ONLY GRADUAL RATE HIKES
This is precisely what we talked about in out last snippet, that the Fed will rather err on the side of caution than to tighten prematurely and risk having to reverse its path of policy actions — which would not only deal great harm to both the actual economy and global financial markets, but also eviscerate the last remaining bits of credibility the Washington-based entity has left.
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"The reaction across stocks, USD, gold, and U.S. treasuries post a quasi-dovish FOMC, or what we call a "hawkishly-dovish" statement.
Equities are higher post event as risk flows turn positive after the initial knee jerk lower. SPX is attacking the week's highs as we go to print.
The U.S. dollar is weaker post event after initially ramping, again on a knee jerk. It seems market participants view the April statement as more bearish the dollar than bullish, despite FOMC having removed the emphasis on negative global risks, and reasserting that the labor market is on track to reaching full employment.
Bonds are higher (yields lower) post event, and are perhaps the single most dire
ctional asset class here other than equities. Markets clearly view the statement as dovish — Bullish for equites and bonds, bearish for dollar.
And lastly, Gold remains confused after dumping on a knee jerk, then rallying to unchanged, then dumping again before somewhat stabilizing slightly lower pre-FOMC. We note that silver is trading much stronger than gold is."
Business Of Finance on Facebook, 28 April 2016