Fed Day

Big move post-Fed today. Market had priced in some Fed help, perhaps with a more neutral stance on monetary policy, but received full Fed hawkishness. Pretty quiet trading day going into the meeting, although the 7bp flatter curve was weird. Then the Fed hits, yield curve steepens 7bps, then goes right back to the flats.

One lesson the market will teach over and over again is that getting the forecast right does not necessarily mean you will be able to out-guess the market. After the initial Fed announcement, the fixed income market dropped, as did equities. Then the fixed income market flew up as equities continued to tank. Finally the fixed income drops like a rock while equities start flying up. Weird volatility. Certainly nothing I can explain.

A day as exciting as today, I was surprised how un-engaged a lot of the interns and new analyst/associates were. This is exactly the sort of day you can learn a ton about market dynamics and ask questions about why things are moving as they are. I'd be willing to guess that at least a couple of them didn't even know why today was such a big day. If you're new or interning, get engaged. Watch markets intraday every day. Get your mind into it and try to figure out WHY everything is happening (as opposed to staring at it mind-numbingly like your favorite sit-com).

"Engage, Maverick, engage!"