Post Fed - With little inflation and high unemployment, the Fed was not expected to do much to change their stance, especially after Chairman Powell unveiled the new inflation criteria in Jackson Hole last month. The Fed did not change rates, and actually moved their expectations for low rates through 2023, when they see inflation moving towards 2%. That extra year (rate low through 2022 was the original view), showed that Powell intends to help heal the economy with low rates, even if that may push certain assets higher. Also in its statement, the Fed will continue with their asset purchases. Pre-Fed, the S&P 500 was trading around 3404, Nasdaq -57bps, and Treasury yields at 0.67%, but after the more dovish stance, Tech has traded up from its lows, and this has helped Nasdaq off its lows (now down 10bps), and the 10-year is yielding 0.70% (day’s high). This can all change of course in the last hour!
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