Market Alert - FOMC Decision

+25BP, 3 more hikes next year on top of 2198 3.

Inflation outlook: Sees little change despite upgrading the economy. See inflation at roughly 2% where it expects it to stabilize.

Unemployment: 3.6% in 2019

Basically the Fed sees the economy strengthening with low unemployment but little inflation. That is very Austrian/Chicago School versus Phillips Curve/Princeton.

Bond yields jumped to 2.345% 10 year. 2.37% was the high on the statement.

Dollar: Fell quickly on the news but is near unchanged.


Stocks: Initial reaction was upside in a big way, then they sold it off back to the pre-FOMC levels (modest gains after that lower open). Now they are moving up off that pre-FOMC level, but this is likely a bit of back and forth as the market digests a Fed that sees a good economy ahead but also sees 'tame' inflation. Perhaps a bit more hawkish statement, and if the market can swallow this and not regurgitate it later, that is a stock positive.

SP500 15.82, 0.59%
NASDAQ 34.12, 0.46%
DJ30 189.60, 0.77%
SP400 0.71%
RUTX 0.64%
SOX 0.88%
NASDAQ 100 0.35%
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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