The Fed Announcement and press conference may not have left bonds in hugely different territory today, but the 2pm-3pm hour was one of the wildest 60 minute rides of the year.  It all begin with the very-much-expected 25bp rate cut from the Fed and a slightly less anticipated policy announcement that left very little changed from the previous version.  Markets initially read that as unfriendly for bonds before taking heart from the early termination of the Fed's balance sheet run-off.

Powell brought the pain, and the pleasure, and the pain, and then the pleasure again, in that order, and by increasing degrees.  Simply put, reporters and markets wanted to pin him down on any sort of leaning with respect to rate cut plans in the future.  In the same breath, he gave two completely different answers.  At least, the answers appeared to be different (and markets traded them accordingly).  Realistically, it was just Powell's unfortunately clumsy way of saying "lay off me guys... I can't predict the future.  We cut today.  We'll cut some more if we need to and we won't cut anymore if we don't need to.  Cheers!"

Bonds tanked when Powell said this isn't the start of a rate cut cycle and they rallied just as much when he clarified that he DIDN'T say today's cut was a cycle of "just one."  Details details!

As expected, this leaves a ton of importance on economic data.  One caveat though: economic data abroad will be important because Powell leaned heavily on overseas weakness as justification for the cut.  This could provide some insulation against extra strong domestic economic data.  If today's 44.4 vs 50.6 reading in Chicago PMI is any indication, maybe we need to think more about what extra weak data would suggest?