The Fed's impact on the market is minimal, and the S&P 500 index ultimately closes flat.
While the qualitative assessments of the meeting had the hallmarks of a hawkish spin, market reactions were much more muted as actions ultimately speak louder than words. The fact that the Fed decided to ‘skip’ (or pause) against the recent softer inflation data is hard to ignore, regardless of how tough they sound on their forecasts, which they themselves admitted to be error-prone. As such, the yield curve flattened / re-inverted aggressively as bond markets continue to bet on an economic slowdown with more sustained disinflationary pressures against a hawkish rate backdrop.
