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Market Snapshot January 26, 2022

Good Morning on this best day of the week Wednesday. It is also Fed day…

There is nothing else to talk about other than the Fed policy, which came out a bit hawkish and for the moment, has bonds selling and rates inching up (nothing substantial). Here is a recap from the WSJ as we await Chairman Powell’s press conference and comments on about 10 minutes which will likely have a bigger impact on markets. Cliff notes are that markets heard the statement to mean four rate hikes in 2022 (it was expected and that is why not much movement so far).

The Federal Reserve held short-term interest rates steady on Wednesday and signaled intentions to raise them in mid-March, the latest turn toward removing stimulus to temper elevated inflation. “It will soon be appropriate to raise the target range for the federal-funds rate,” the Fed said in its postmeeting statement.  The central bank approved one final round of asset purchases, which will bring that stimulus program to a conclusion by March. Officials continued deliberations at their two-day meeting over how and when to shrink the Fed’s $9 trillion securities portfolio, which has more than doubled since March 2020. The Fed released a separate one-page statement that spelled out high-level principles to guide that process. The Fed cut short-term interest rates to near zero and started buying bonds to lower long-term rates in 2020 as the coronavirus pandemic hit the U.S. economy, triggering financial-market volatility and a deep, short recession. Officials pledged to hold interest rates near zero until inflation was forecast to moderately exceed 2% and until the labor market returned to levels consistent with maximum employment. The Fed indicated in its statement that these goals were effectively met. The central bank also removed a key opening sentence from its statement that it had used since March 2020 to signal it would aggressively support growth amid an unprecedented global pandemic.

Please remain safe and healthy, make today great.