Friends
Traders seemed a bit confused (as per usual) when the FOMC statement came out, as stocks gyrated in every direction for a period of time. But, by the time Chair Yellen began her press conference, market participants decided that buying stocks was the appropriate response to the release. After spending time in both positive and negative territory throughout the trading session, stocks settled in to modest gains by the close.
For the day, the Dow Jones Industrial Average was up 30 points to close at 17,935. The S&P 500 was up 4 points to finish the day at 2100. Gold was up $5 to trade at $1186 per ounce, while oil was down $.12 to trade at $59.85 per barrel WTI.
Now let’s review what the Fed statement and Yellen presser revealed. Basically, not that much. Yes, there was talk about the “dots” (economic projections of FOMC participants), and Ms. Yellen stated that the committee’s projections are that Fed funds will rise (lift-off will happen) to 1 ¾% by late 2016, and 2 ¾% by late 2017 (You buying that?). She did confirm that most of the members of the committee believe that we will see one or two rate increases this year. Our bet is still one, likely in September. The Chair reiterated that objectives for both employment and inflation (they want more) have not yet been met, but they believe that those objectives visible as the year progresses.
All said and done, stocks have not done much so far this year, and we are very near the halfway mark. Bonds, after an early in the year rally, have lost their luster recently, as anticipation of a rate hike has permeated the market. We’ll watch the aftermath of the meeting and let you know how the rest of the week plays out.
Have a nice evening everyone.
