Via ZeroHedge:
As usual, the only thing to kneejerk almost as fast as stonks after the FOMC statement release, is the barrage of bite-sized comments from the strategist/economist peanut gallery. And since today is no difference, with the digital ink on the FOMC statement still wet so to speak, here is the first barrage of sellside reactions.
Omair Sharif of Inflation Insights
“The FOMC statement was more dovish on inflation, albeit still cautious, but the one word change from the ‘pace’ of future rate hikes to the ‘extent’ of future hikes tells you that when the Minutes come out, we’ll likely read that officials have begun to debate when to pause. “It seems that the market is taking this as somewhat hawkish because the Fed actually plans to follow through and get to 5.00%-5.25% on the funds rate as opposed to market participants’ hope that perhaps this would be the last hike. No such luck, but I think acknowledging that inflation has moderated somewhat and signaling that the ‘pause’ debate is underway is dovish.”
Ben Jeffery at BMO Capital Markets says:
“Biggest takeaway from the FOMC statement, along with the widely-expected 25 bp rate hike, was that the Fed opted to leave ‘ongoing’ within the formal language and indicated that there are more tightening moves to be realized this cycle.”
Priya Misra at TD Securities says
“So far slightly hawkish message -- inflation has eased but remains elevated. They hiked 25bp and likely will hike a few more times in their base case. Should move front end rates higher. Not good for risk assets so long end might keep a bit of a bid. Focus on whether Powell talks about his current view on the terminal rate and fin conditions at the presser.”
Dennis DeBusschere, of 22V Research
“As always, wait for the press conference, and in particular, how much Powell focuses on pain. The need for the economy to take some pain, or not. At the last meeting, he was very pain-focused.”
Avery Shenfeld, chief economist at CIBC Capital Markets
“Nothing to see here, folks.” But the retention of “ongoing increases” guidance could be, essentially, an effort to address the easing in financial conditions: “That could be an effort to push the bond market towards higher yields in the here and now.”....
....MUCH MORE
I'll tell you what the Fed does not want to see, WSJ headlines like this one yesterday:
PulteGroup Stock Jumps After Homebuilder Reports Higher Profit
By buying Fannie and Freddie mortgages gussied up as mortgage backed securities and depressing mortgage interest rates the Fed created the housing bubble.
And that bubble has effectively locked an entire generation out of home ownership because prices got to around double what we would have seen without the interest rate manipulation. so they at minimum want to give the appearance of letting the air out of the balloon, whether or not that is the actual intent.
Sometimes I think it was deliberate.
