Where does yesterday's FOMC Announcement leave us in terms of the rate outlook?  The same place we were before the FOMC Announcement!

The only thing it changed was our level of respect for the Fed.  This one was a rare example among Fed statements in that there's really not any way to argue that it was worthwhile or that it even represented defensible policy stances.  In fact, it was almost like some sort of April Fool's joke with respect to "considerable time."

You saw what happened with that, right?!  It was quite something.  Markets had been hung up for several months now about whether or not the FOMC Announcement would remove the Fed's "considerable time" verbiage (used to refer to the time between the end of asset purchases and rate hikes). 

The Fed left it in the previous statement and no one cared.  Markets were geared up to care even more this time, and the rather than simply take it out or leave it in, the Fed threw an hilarious curveball.  Instead of directly referring to current policy expectation for a considerable time to pass between October and the first rate hike, they inserted new verbiage (something about "patience," I don't know... does anyone even read this crap?) and then labeled the new verbiage as being "consistent with its previous statement that it likely will be appropriate to maintain the 0 to 1/4 percent target range for the federal funds rate for a considerable time following the end of its
asset purchase program in October."

Are you kidding me?  They couldn't decide?!  So... so they... did both?!

Either this is the silliest thing that's happened in an FOMC Statement in a long time or it's a stroke of genius designed to ruffle the fewest number of feathers.  One thing is absolutely certain though: NO ONE CARED!  There's nothing anyone could do to convince me that the removal of the "considerable time" verbiage would have caused any major drama yesterday.  Leaving it in clearly didn't matter either, because trading levels didn't bespeak any shift in rate hike anticipation.  Quite the opposite, by some accounts, as the dollar strengthened--suggesting markets saw something hawkish in the statement.

The hawkishness was probably from the Fed having their head in the sand regarding global systemic risks and the potential downside of the oil price slide.  Moreover, the Fed still thinks inflation will miraculously show up once oil goes through this little phase.  Why now?  The "considerable time" part was mostly priced-in from what I heard.  Volume totals agreed that yesterday wasn't a big deal.

Even so!  It may be a turning point, simply due to bad timing.  It's the 2nd day in a row where yields have moved higher during the domestic session and the 2nd time this week that bond markets have lost ground compared to the previous session's close.  The technical landscape is getting ominous as well.  Marked up in the chart below are the following:

1. yields bouncing off the lower bollinger band, suggesting support at 2.20

2. Stochastics crossing above the 20% line--a sell signal

3. MACD lines ascending--a sign of negative momentum

4. RSI breaking back over 30--a sign that rates are now embarking on a corrective move after being overbought

Of course all this technical hocus pocus is just that, but I was getting tired of saying that rates are going to go wherever the global risk-on/risk-off trading momentum takes them, and ranting about the Fed and technicals seemed like an easy out.