I wonder what economic and monetary model the Fed is experimenting with these days.
Their credibility is on the line and as the chart below demonstrates since they’re making things up as they go along.
Other highlights from today’s Fed meeting include comments as Zero Hedge pointed out:
*FED REPEATS IT CAN BE PATIENT IN STARTING TO RAISE RATES
*FED SAYS ECONOMY HAS BEEN `EXPANDING AT A SOLID PACE'
*FED CITES `STRONG JOB GAINS' AND LOWER UNEMPLOYMENT RATE
*FED SAYS INFLATION EXPECTED TO DECLINE FURTHER IN NEAR TERM
“So shrugging off the global tumult, The Fed appears set to raise rates no matter what to remove themselves from the corner they are stuck in, wary of what they can do when the next event hits home.”
In sum a fairly hawkish statement but maybe that’s just me since I slept through my money and banking class. In any event, the statement, data and logic are mystifying.
Bulls weren’t pleased and once the algos were clued-in the statement wasn’t dovish as they expected selling appeared once again. As of the close of trading markets were very weak overall.
Leading market sectors higher included: Volatility (VIX), Dollar (UUP) and Bonds (TLT).
Leading market sectors lower included: Everything else.
The top 20 market movers by percentage change in volume whether rising or falling is available daily.
Volume increased with selling as markets closed on their lows. Breadth per the WSJ was negative.
Up is down, down is up at the Fed now.
The key to this thinking is that despite the wrong-headed analysis by Fed FOMC voters the primary reason is they realize they must end what they’ve started.
If it takes some bending of the truth to get out of the corner they’ve placed themselves in then so be it.
Thursday brings Jobless Claims and Pending Home Sales once again. Friday is GDP data and that will be interesting. Bulls have a few days to save the week and January performance.
Let’s see what happens.
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Dave Fry is founder and publisher of ETF Digest and has been covering U.S. and global ETFs since 2001.
He is the author of "Create Your own ETF Hedge Fund: A Do-It-Yourself Strategy for Private Wealth Management" published by Wiley Finance and "The Best ETFs: U.S. Equities, A Companion Guide to Building Your ETF Portfolio"
Disclaimer: The charts and comments are only the author's view of market activity and aren't recommendations to buy or sell only any security. Market sectors and related ETF's are selected based on his opinion as to their importance in providing the viewer a comprehensive summary of market conditions for the featured period. Chart annotation's aren't predictive of any future market action rather they only demonstrate the author's opinion as to a range of possibilities going forward. More detailed information, including actionable alerts, are available to subscribers at www.etfdigest.com
|WTI Crude Futr||44.33||-1.90||-4.11 %||16:21|
|US Dollar||94.86||-0.02||-0.02 %||16:43|
|Brazil||1849.119||1.16 %||0.92 %||0.92 %|
|Russia||431.955||0.67 %||6.68 %||6.68 %|
|India||544.284||0.16 %||9.65 %||9.65 %|
|China||68.813||-1.06 %||4.20 %||4.20 %|