Federal Open Market Committee March meeting results in no policy change. Language a bit more optimistic, but no near term rate change signalled. Kicking the can down the road some more, and Hoenig remains the lone voice of dissent. As expected, Fed support of the MBS market will be allowed to end per previous schedule. It will be interesting to see how the real estate markets fare through the remainder of the year. There have been some pretty bold predictions.
Post Fed, Dollar is selling off, the SPX & Treasuries are up. I’m sticking with my call for a near term correction in the major stock indexes, as the gauges are still buried in overbought territory and volume continues to be anemic. We’ve seen this situation go on for longer than anyone thought possible, so I’m not short here (at least not yet), but I wouldn’t chase this rally either.
Scott Grannis has posted an interesting chart of several commodity groups, showing solid upward price trends across the board. He’s firmly in the inflation camp, and would have supported Fed tightening.