The Dollar Index is spiking and so were US bank stocks, but the rest of the stock market is not so pleased and bonds, crude, and bullion are being sold along with them...and now banks are tumbling too...
And bank stocks loved it...
Until they didn't...
Dollar is surging back to the top its recent range...
as the dollar pushed higher so crude tumbled to a $50 handle...
Just as Mario Draghi exlained how his reduced bond buying was not a taper, we suspect the narrative espoused by Janet Yellen in her press conference today will be just how dovish this rate hike is.. and how the rate of normalization will be very gradual. The big question is, how will she respond to question about Trump's fiscal stimulus plan? Of course, this also may be her last flourish as Fed head, so anything goes.
Live Feed:
http://www.youtube.com/watch?v=eMmdpP9SaAo
While the 25 bps rate hike was a given, the question on everyone's mind was how many rate hikes does the Fed envision for 2017. The answer, somewhat surprisingly, is three, an increase of one compared to the September meeting.
This is median assessment of appropriate pace of policy according to the dots:
With 100% chance of at least a 25bps hike (and 10% chance of 50bps), this was perhaps the most 'priced in' of any Fed meeting ever. Of course, it is not whether the Fed hikes or not at a given meeting that matters, but rather what kind of overall hiking cycle it communicates, and so attention is focused on changes to the 'dot-plot'. No surprise here: FED RAISES RATES BY 25 BPS, REPEATS GRADUAL POLICY PATH PLAN, but the forecast is more hawkish: FED OFFICIALS SEE THREE 2017 RATE HIKES VS TWO IN SEPT.