The USD surged and Treasury bond prices and precious metals tumbled instantly on the FOMC's statement but stocks decide it was time to ramp to VWAP (and VIX was hammered lower). After the initial knee-jerk, stocks caught back down to the reality of the other markets as it appears the investing public chooses to "sell the news" on the basis that the Fed removed the 'tightening conditions' language. The only question now is just how much of November, December, and January's seasonal hope has been pulled forward into the last few days.
Pre-FOMC: S&P Futs 1761, VIX 13.98%, 10Y 2.48%, Gold $1353, USD 79.46
Current: S&P Futs -5, VIX unch, 10Y +5bps, Gold -$12, USD +0.4
- 1401ET - *NASDAQ BX INVESTIGATING ISSUES WITH A NUMBER OF CUSTOMER HOSTS
- 1435ET - *NASDAQ BX SAYS CUSTOMERS ABLE TO DO SO CAN FAIL OVER TO BACK-UP
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VIX was sold into the meeting and after (as we suspect hedgers lifted they hedgs AND their underlying exposure into the equity market kneejerk rally)...
and S&P futures were levitated instantly to VWAP (and again) before collapsing...
The mainstream is confused - The Fed gave us what we wanted so why is it all falling apart?
The Fed removed "but the tightening of financial conditions observed in recent months, if sustained, could slow the pace of improvement in the economy and labor market.." from the statement below:
The Committee sees the downside risks to the outlook for the economy and the labor market as having diminished, on net, since last fall, but the tightening of financial conditions observed in recent months, if sustained, could slow the pace of improvement in the economy and labor market..