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Another Big Reversal FOMC Day: Markets Call Fed's Bluff

[thegreenmile656]

https://www.zerohedge.com/markets/markets-swing-wildly-hawkish-powell-pummels-pause-narrative-then-opens-door

Another Big Reversal FOMC Day: Markets Call Hawkish Fed's Bluff

by Tyler Durden

Wednesday, Dec 14, 2022 - 04:00 PM

The day started off with a drop in import and export price inflation. But that was just a side-show as stocks limped higher into the main event.

Then The Fed and Powell's presser smashed the vase of fantasy on the ground of reality with a hawkish statement and projections and an even more hawkish Powell.
   
• POWELL: LABOR MARKET REMAINS EXTREMELY TIGHT

• POWELL: A RESTRICTIVE POLICY STANCE LIKELY NEEDED FOR SOME TIME
   
• POWELL: NEED SUBSTANTIALLY MORE EVIDENCE OF LOWER INFLATION
   
• POWELL: FED STILL HAS SOME WAYS TO GO ON RATE HIKES
 
• POWELL: STANCE ISN'T YET RESTRICTIVE ENOUGH EVEN W/ TODAY'S MOVE
 
• POWELL: NO RATE CUTS UNTIL CONFIDENT INFLATION MOVING TOWARD 2%

• POWELL: WILL HAVE TO HOLD RESTRICTIVE RATES FOR SUSTAINED TIME

All of which sent rate-hike expectations surging, but they gave back some of that hawkishness as Powell spoke...



Source: Bloomberg

The market is now pricing in rates being lower than current rates by Jan 2024...



Source: Bloomberg

The market is not buying what The Fed is selling...



Source: Bloomberg

The markets did their usual thing - jerking one way on the statement, then swinging all the way during the press conference which was as usual full of contradictions...