Well, that could have gone better…

This morning I explained briefly why I thought the Federal Reserve had an opportunity to pause today as opposed to doing its widely expected fourth interest rate hike of 2018.

But they hiked. And, I guess, attempted to accompany the hike with somewhat dovish language to cushion the blow, sort of?

It didn’t go well. The Dow, which had been rallying into the decision / press conference ended up absolutely hammered, and the 10-year sold off, which tells you everything you need to know about the market’s confidence in next year’s economic outlook.


The Dow Jones Industrial Average swung nearly 900 points Wednesday, slumping after the Federal Reserve raised interest rates for the fourth time in 2018 and signaled a milder path of increases over the next year.

Major indexes turned negative following the Fed’s decision then tumbled anew during Fed Chairman Jerome Powell’s remarks, falling alongside long-term Treasury yields as investors worried about the outlook for the economy.

The Dow industrials slumped 352 points, or 1.5%, at 23324, after falling as many as 513 points while Mr. Powell spoke. The index had been up about 300 points just ahead of the interest-rate decision.

I tried to tell ’em.

Now we see what the follow-through overseas looks like. The Treasury bond yield curve has absolutely collapsed. The spread between the 2’s and 10’s got to within 11 basis points at its low today, and the 2’s and 5’s actually inverted.

This evening you’ll be treated to a smörgåsbord of hot takes about what Jerome Powell was really thinking today. Was he trying to demonstrate his complete independence from the President’s wishes? Was he trying to maintain discipline in the markets? Did he really think that the data warranted further action today? Or did Hillary’s people get to him just before showtime?

We’ll never truly know.


This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here: https://www.ritholtzwealth.com/advertising-disclaimers

Please see disclosures here.

What's been said:

Discussions found on the web
  1. HP G510n manuals commented on Jan 21

    … [Trackback]

    […] Read More here on that Topic: thereformedbroker.com/2018/12/19/well-that-could-have-gone-better/ […]

  2. bmo online banking canada commented on Jan 26

    … [Trackback]

    […] Read More on that Topic: thereformedbroker.com/2018/12/19/well-that-could-have-gone-better/ […]