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1.28.2015 Fed Confusions Bookmark

Everyone waited with the proverbial "baited breath" to see what the Fed's were going to say about monetary policy. But what they said, threw the algo-bots for a bit of a loop. They wanted pure hints that the Fed's were not going to hike rates this year, but instead they got a statement suggesting that the economy is really strong, jobs are really strong and while they can be patient about rates, they removed the "considerable time" language from the statement.

Everyone waited with the proverbial "baited breath" to see what the Fed's were going to say about monetary policy. But what they said, threw the algo-bots for a bit of a loop. They wanted pure hints that the Fed's were not going to hike rates this year, but instead they got a statement suggesting that the economy is really strong, jobs are really strong and while they can be patient about rates, they removed the "considerable time" language from the statement.

So in a very strange reaction, the market really didn't know what it wanted to do. The initial reaction was a jump higher, but soon that faded off and a full half hour later we were virtually "unchanged". Then we dipped red by about 45 points, only to see them start pulling us back up. It was one of the most muted reactions I've really ever seen concerning a Fed statement.

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