Fed's Unsurprising Hike Gives the Machines Something to Act On

 | Jun 13, 2018 | 2:26 PM EDT
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The Federal Open Market Committee raised interest rates a quarter point as expected. The accompanying policy statement is signaling two more rate hikes this year, which isn't unexpected but is more hawkish than some have hoped. Expectations for rates at the end of 2019 are now up to 3.1% from the March forecast of 2.9%.

While the Fed notes that labor markets, economic activity and household spending are solid, there is still no indication of a surge in longer-term inflation.

The algorithms sold the news immediately, but it was quickly bought before the indices rolled over again.

There is nothing very surprising in this news but conditions are good for a "sell the news" reaction. Typically that hasn't lasted for long but the sell programs seem to be operating for now.

Don't forget that there is a press conference coming up and that can change the tone of things very quickly. Right now the sellers have some traction and are pushing, although the news isn't anything that justifies a major reversal.

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