Wednesday's question of the day was a bit of a head-scratcher.
After listening intently to first the FOMC statement and then the ensuing press conference, the question apparently on investors' minds was: When a change is made to the Fed's statement on monetary policy, and yet the statement itself stresses that the change doesn't represent a real change, did anything a change, or not?
By now, most of you are probably well aware of the fact that, in her first meeting as Chair of the Federal Open Market Committee (aka "the Fed"), Janet Yellen made some adjustments to the "guidance" that relates to what to expect from the Fed in the future.
Based on the reaction of the algos at Virtu, Getco, Citadel, Goldman Sachs (NYSE: GS), JPMorgan (NYSE: JPM), et al, traders did not like what they heard.
Related: Are Stocks Becoming Over-Owned?
Immediately following the release of the Fed statement, the S&P 500 (NYSE: SPY) dove 10 points. However, that is a pretty typical response to Fed announcements. No, the bigger problem came later during the Q&A session of Yellen's press conference.
What Changed?
For starters, Yellen dropped the 6.5 percent unemployment rate "threshold" that, up to this point, had been viewed as the trigger that would cause the Fed to begin making changes to monetary policy. And while selling stocks on this may have been programmed into the algos, the move was widely expected.
Yellen explained that, instead of a pre-set line in the sand (aka 'quantitative-based guidance') that Ben Bernanke wanted the markets to be able to see at all times, the Fed was moving to something a bit less transparent, something that was, well, a lot more ...
