FOMC Statement & Market Observations
No surprises from Benny and the Feds, a 25bps raise to 4.75% and more to come. "..some further policy firming may be needed."
"The slowing of the growth of real GDP in the fourth quarter of 2005 seems largely to have reflected temporary or special factors...
possible increases in resource utilization, in combination with the elevated prices of energy and other commodities, have the potential to add to inflation pressures."
Full Text
Market Observations
Yesterday: "An indication of pause in rate increases by the Fed will send the market upward. An indication of continued rate increases or a statement lacking direction will be interpreted negatively."
Shortly after the FOMC announcement at 2:15 PST which indicated further rate increases, the market dove off its bar stool after taking too many bond yield shots. As bond yields jumped up to touch 4.80 across the yield curve.
As noted in previous posts 03/23 was six weeks since 02/09 when the 2 yr note went above the 30 yr in a full tilt boogey yield curve inversion. In 2000 it took 6 weeks and 2 trading days of inversion for the market to fall over on its side 03/10/2000.
The OEX, NYSE, DJIA, SP500 are all downtrending since 03/20. The RUT, MID, XAU, XOI and NAZ have bucked the trend, until today. The MID & RUT made all time highs today.
All major indices crashed through short term support on higher volume. Tomorrows 5 yr note auction could pull liquidity out of the market. Lets watch closely and see if the elephants start heading for the exits.
"The slowing of the growth of real GDP in the fourth quarter of 2005 seems largely to have reflected temporary or special factors...
possible increases in resource utilization, in combination with the elevated prices of energy and other commodities, have the potential to add to inflation pressures."
Full Text
Market Observations
Yesterday: "An indication of pause in rate increases by the Fed will send the market upward. An indication of continued rate increases or a statement lacking direction will be interpreted negatively."
Shortly after the FOMC announcement at 2:15 PST which indicated further rate increases, the market dove off its bar stool after taking too many bond yield shots. As bond yields jumped up to touch 4.80 across the yield curve.
As noted in previous posts 03/23 was six weeks since 02/09 when the 2 yr note went above the 30 yr in a full tilt boogey yield curve inversion. In 2000 it took 6 weeks and 2 trading days of inversion for the market to fall over on its side 03/10/2000.
The OEX, NYSE, DJIA, SP500 are all downtrending since 03/20. The RUT, MID, XAU, XOI and NAZ have bucked the trend, until today. The MID & RUT made all time highs today.
All major indices crashed through short term support on higher volume. Tomorrows 5 yr note auction could pull liquidity out of the market. Lets watch closely and see if the elephants start heading for the exits.
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