Image Source: Pexels

Since The Fed's (uber dovish) last meeting on December 13th, the dollar is down, bonds and gold are up, and bitcoin and big-tech are surging... in other words - the QE-trade or 'buy all the things'...

(Click on image to enlarge)

Source: Bloomberg

While all yields are lower since the last FOMC meeting, the short-end has dramatically outperformed (with the last few days rescuing the long-end). The curve has steepened dramatically with 2s30s swinging from -45bps to +10bps since the last meeting...

(Click on image to enlarge)

Source: Bloomberg

And finally, right in the middle of The Fed's meeting NYBC blows up, sending rate-cut expectations soaring (as traders reached for safe-havens like gold and bonds), putting The Fed in the awkward position of likely having to push back against the bullying market (after all the jawboning of the last month was wasted)...

(Click on image to enlarge)

Source: Bloomberg

So, what did The Fed do (and say)...

The FOMC voted unanimously to leave the benchmark rate unchanged - as expected - in target range of 5.25%-5.5% for a fourth straight meeting while making significant changes to the statement.

The statement was very much more hawkish than expected:

The Fed pushed back aggressively against the dovish market stance:

“The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent.”

The Fed did leave the door open for cuts at some point...

“The Committee judges that the risks to achieving its employment and inflation goals are moving into better balance.”

Perhaps even more notably, The Fed removed the following sentence from the statement:

"The U.S. banking system is sound and resilient."

Which makes sense given the shitshow at NYCB today (and the March chaos ahead).

Does the Fed no longer saying that "the U.S. banking system is sound and resilient" mean the banking system is no longer sound and resilient, or was it just a lie before to convince the population of something which was not the case?

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