The Fed governors and bank presidents do a good job of giving speeches with some indications about what they will do at a Fed meeting. These comments are still too noisy, but the market can handicap the immediate actions of the Fed. Nevertheless, it is much harder to handicap the comments by Chairman Powell during the press conference and forecast what the quarterly SEP forecasts will look like. The action is in the SEP (Summary of Economic Projections) which now show that one more hike is likely but two cuts in 2024. The rates will be higher for longer and this is what is driving the markets. Tight money is not going away and that is not what was expected. The market sell-off was quick once it was understood there would be no magic liquidity bullet later this year. The difference between the old and new SEP is a market driver even though the construction is a just an average of dot-plot forecasts.
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