The FOMC smartly executed an overall set of communications that struck a balance between ruling out nearer term easing, sticking to the line that the most likely next move is down, while pouring cool—not ice cold—water on the risk of rate hikes. The result was taken reasonably well by markets and broadly met my expectations for Powell & Co not sounding more hawkish than what was already priced going in. Grade ‘A’ in my view. Markets See-sawed But Generally Liked It: Fed funds futures pricing for cumulative easing this year increased by a few basis points compared to just before the 2pmET statement (chart 1). ... (full story)