Ignoring the "relatively soon" balance sheet unwind, the dollar index is careening lower (at 14-month lows) on inflation-weaker signals from The Fed.
And gold spiked back above its 200DMA ($1251)...
However, stocks limped higher as VIX crashed to a record low 8.84...
As Bond traders feel the short squeeze coming on...
With 'zero' expectations for a rate-hike today, all eyes are focused on any shifts in The Fed's balance sheet normalization timeline ("balance sheet unwind to start relatively soon") and its most-recently-dovish inflation outlook (following the weak June CPI print, The Fed now says "inflation seen rising to 2%" but is weaker").
Key takeaways from FOMC:
From 720Global
Below are 22 troublesome facts explaining why the herd may, in fact, have it wrong.
Equity/Bond Valuations
WTI prices kneejerked higher after last night's yuge crude inventory draw reported by API but prices have leaked lower into the DOE print. Expectations were for a 4th straight weekly draw in crude (thanks to robust refining activity) were confirmed with a 7.2mm inventory drop (less than API's 10.2mm), and Gasoline also saw a major draw (as opposed to API's build). However, exuberance in WTI is not evident as Lower 48 production surge above 9mm barrels for the first time since July 2015.
API
Unlike the June Fed meeting, the FOMC announcement at 2pm today is expected to be an uneventful affair: as DB's Jim Reid pointed out earlier, "given its late July and given the Fed will likely announce an end to balance sheet reinvestment in September (starting from October), this could be a relatively dull meeting."