F_E_D Sounds Lost

It has been my opinion that the F_E_D needs to hike for reasons they haven't made clear and don't want to make clear, but perhaps the BIS (Bank for International Settlements, also known as the Central Banks' bank) has in their annual assessment in which they called "Leading Central Banks " as being so overstretched or stretched thin, that they (the BIS) doubts they'd have the resources to deal with even a "garden variety" recession, much less something worse.


The last policy statement definitely came off more hawkish than usual, but the minutes, if not more dovish than the policy statement, are at least, well.. more confused with the F_E_D not sure which indications to look at and what are appropriate levels. In initial reading (I haven't read the entire document), there also seems to be a move toward redefining inflation or maybe even deflation to account for effects of lower oil prices. All in all, the tone of the minutes is quite different than that of the policy statement.

The F_E_D has gone from "Lower oil prices are transient and if anything, good for the economy" to "Lower oil prices" could dampen economic expansion, gee you think? I'm specifically talking about the lay-offs and the US Shale drillers being squashed out of existence by low oil prices.

There was talk about removing patient and how that may lead the market to focus on a date. They did find agreement that policy should stay data dependent, which is almost ridiculous, what else would it be? I suspect there's a reason that was injected in to the statement that we'll only understand later.

While there was certainly a general cautious tone, more so than the policy statement, they also added the strange, "Risks to their outlook remained balanced", so there's pretty much two different messages in one statement which could represent the differing views of members, but the way it was worded was more toward consensus, it wasn't "Some F_E_D officials", it was "F_E_D officials".

Interestingly in the initial knee jerk, Financials didn't move with the market.

 Financials did not act well right off the bat.

While it's still early, the IWM has retraced the knee jerk gains.

As have the Q's

And the SPY... but,

The $USD has not...

There's plenty to check on in the next hour, I don't assume a knee jerk reaction is over that quickly, but for now, it is as you see it.