<\/a>Financials<\/u> –
\nI\u2019m hard pressed to find much substance in yesterday\u2019s FOMC statement.\u00a0 It seemed they walked a fine line and avoided sounding either especially dovish or hawkish.\u00a0 It is interesting to note that the Fed points out that economic activity has slowed, but then they go on to say that such slowing growth is likely to be transitory.\u00a0 Looking at the statement, I really don\u2019t get the sense they wanted to give a definitive statement on the potential for a June rate hike.<\/p>\n
That said, it sure seems like the market is now fully onboard a June rate hike.\u00a0 After the statement release, rate hike odds have surged from around 60% to roughly 94% at the time of writing.\u00a0 This is an interesting reaction because I didn\u2019t view the statement as overly hawkish.\u00a0 I don\u2019t necessarily think the reaction is wrong, but I would only point out that we know the Fed doesn\u2019t want to surprise the market on anything so if the market is reacting \u201cincorrectly\u201d we will probably hear dovish comments from Fed speakers in the near future.\u00a0 I don\u2019t see any comments due today, but several speakers are out tomorrow including Fed Chair Yellen.<\/p>\n
In Washington today, we could get a vote on the House plan to repeal Obamacare as early as today.\u00a0 That said, it still doesn\u2019t sound like anyone is 100% confident they have the votes needed to pass the plan.\u00a0 Obviously this will be a big hurdle for the administration and if the plan fails again, the market will probably not like it.<\/p>\n
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