Wednesday, January 4, 2017

FOMC Minutes Preview: The Stock Market, Not The Fed, Is 'Behind The Curve'

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*The market is behind the Fed curve.

*Today's FOMC minutes could show some disagreement on how many rate hikes we need this year.

*With inflation picking up the Fed's three hikes may prove conservative.

"Incorporate Some Assumptions Of A Change In Fiscal Policy"
Here's what Fed Chair Janet Yellen said in the post FOMC meeting press conference:
Some of the participants but not all of the participants did incorporate some assumption of a change in fiscal policy into their projections and that may have been a factor that was one of several that occasioned these shifts.
The Fed raised their rate target for 2017 which surprised markets after the Fed had been officially taking a wait-and-see approach to fiscal policy. Some Fed members couldn't wait.
Today's minutes will reflect that jump-start to inflation concerns.
Rate Hike Peaking Markets
Here's the SPY chart after the Fed meeting. That meeting, at least for now, helped peak markets:
Source: Interactive Brokers

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