Yesterday's CPI data gave bond markets cold feet heading into today's FOMC Announcement.  As we discussed, the selling pressure yesterday wasn't the traditional "higher inflation = higher bond yields" sort of equation, but rather a last minute adjustment in expectations for the FOMC to be a bit more stern with respect to inflation.  After all, if CPI rose so much, and the Fed had previously held a pretty hard line on persistently low inflation, maybe we'd hear something different today.

We didn't.

Markets subsequently earned back everything they'd given up yesterday, leaving us painfully close to Monday's latest levels. 

This is made more interesting by the fact that there was indeed an apparent hawkish shift in the rate-hike outlook based on the economic projections:

Primarily, take note of more green dots at higher rates vs red dots in the 2015 column.  This simply means that three Fed members see the Fed Funds rate slightly higher by the end of 2015 than they (or the members they replaced) saw them in March, while only 1 Fed member moved lower in rate (again, this could be one of the new inductees). 

Yellen would go on to characterize this shift as factor of the changing composition of the committee based on those new inductees.  That helped bond markets read even less into it, but they'd already mostly gotten over it due to the balancing out of rate expectations over the longer run (notice more green dots underneath red dots in the "longer run" column).

All things considered, this ended up being yet another miraculously uneventful FOMC day.  Perhaps the true miracle will be when we see something different.