Market Alert - FOMC Decision

FOMC hikes rates 25BP as expected (1.75% to 2.00%)

A short statement, more hawkish than typical.

Initial market reaction is lower with NYSE indices negative, NASDAQ, SOX hanging positive for now.

Bonds: Yield curve flatter. Short end up, 10 year remaining flat.

Still seeing gradual hikes ahead, BUT raised 2018 to 4 hikes from 3 (2.375%

2019: 3.125% forecast FFR
2020: 3.375% forecast FFR

Question: Will Powell say again there is no sign of imminent inflation? That will be a key at the press conference.

Removed: Line re rates remaining below the level expected to run in the long term. Thus, removing the Bernanke indication rates would remain low for a long, long time.

Economy: Referred to it as growing at a 'solid' rate versus a 'modest' rate.

GDP 2.8 2018, 2.4% 2019

Looks as if the entire market will be negative in the near future. Then we see if the bids return. There is still a press conference to come and there is a lot of gyration post-FOMC, particularly when there is a change to language and perceived Fed positioning. Case in point, just as fast as it sold, stocks are surging back up.

SP500 -6.27, -0.23%
NASDAQ 9.46, 0.13%, NASDAQ 42 points off its session high
DJ30 53.45, 0.21%
SP400 -0.57%
RUTX -0.31%
SOX 0.16%
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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