The initial reactions from the sell-side are arriving and while CNBC’s Bob Pisani believes “this is very bullish” the sell-side appears to disagree…
Deutsche’s Lavorgna can’t even find an excuse to push out liftoff…
#Fed remains on track for mid-2015 fed funds liftoff.
— Joseph A. LaVorgna (@Lavorgnanomics) October 29, 2014
Citi Warns:
Fed comes in with a bit of a Hawkish tilt as it rids of key policy line around labor market and keeps “considerable time.” The buying program has ended. Hawks Fisher and Plosser voted for the action, while Kocherlakota voted against it, which is a flip from recent votes.
“The dove dissenting says it all,” trader quips.
And Brean Capital’s Peter Tchir adds:
Hawkish statement:
1) QE gone.
2) The hawks were on board, and a dove took the time to dissent – in our Fed “U” shape pattern, we think the shift to hawkish overall Fed has commenced and the pure hawks are appeased and winning and the pure doves, losing.
3) Job highlighted and as Yellen said back at Jackson Hole – structural unemployment is higher than she thought, so less slack, and as San Fran Fed said recently, when a period occurs where wages were sticky, once they finally start to rise, it happens very quickly
Is March back on the table? If they are only fighting inflation now, they have less ability to enact more dovish policy.
I think this should be a “risk off” trade.
Initial reaction might be “risk on” as they are touting the economy and growth and talk about a great GDP print tomorrow, but
Growth going forward is frought with risk, especially with a less helpful Fed, which will support the long end of treasuries – not the front end.
The market started its big reversal on Bullard’s comments and I find it hard to believe that having his comments not be reflected at all in the statement means we have to head back lower.
HY has been a bit heavy past few days, and since we never saw a true “clearing level” we should see that.
- Short HYG/JNK or TRS.
- Curve flatteners look great to me.
- Strong dollar.
- Weak commodities.
- Short risk.
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via Zero Hedge http://ift.tt/1u8bZ0i Tyler Durden