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Fed Hikes Rates, Unleashing First Tightening Cycle In Over 11 Years

On the 7th anniversary of entering ZIRP, and for the first time since June 29th 2006, The Federal Reserve announced today that it will try and raise interest rates:

*FED RAISES INTEREST RATES 0.25 POINT IN UNANIMOUS VOTE

Of course, the flowery language and dots are as dovish as possible while maintaining some semblance of credibility with regard growth expectations as The Fed unleashes a tightening cycle for the first time in over 11 years.

Pre-FOMC: S&P Futs 2050, 2Y 98bps, 10Y 2.29%, Gold $1072, Oil $36, EURUSD 1.0960

 

 

Heading into the decision, gold and silver suddenly started to fade, bond yields slid notably, and the USD jerked lower.

Fed Headlines:

 

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What's happened since The Fed folded in September? Macro "data" got worse... Market "data" got better...

 

The Fed has never raised rates in December when stocks were down over the last 6 months...

h/t @RyanDetrick

And when it has raised rates in December, stocks have pushed lower.

 

The Fed is raising rates today with the VIX above 20 for the first time since 2000...

 

That did not end well...

 

The Fed is also raising rates with Junk bonds trading worse that after Lehman...

 

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Full Redline below:

The number of words per statement:

 

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Of course, if this doesn't work to revive animal spirits, there's always Plan B...

Source
US Federal Reserve