Takeaways from the FOMC
The lesson from every Fed meeting is that the price action never matches the hype and that was no different today. In the bigger picture, we were looking for some answers and got some but new questions were raised.
1) Accomodative was removed
That was the big 'action' in the statement because nothing else changed. In the press conference said the point of it initially was to signal that even though the Fed was hiking, that doesn't mean they were cooling the economy. He said that's outlined its usefulness, which is a bit like saying they are now cooling the economy. However he later revisited the comment and said that it doesn't mean anything.
2) Enough neutral already
Powell sounded like someone who had just finished two days of meetings where people blabbed endlessly about where 'neutral' is, with no one ever coming close to an answer. So now he wants everyone to forget about it.
3) Here's the plan
The bottom line is that the Fed is on a path, which isn't entirely clear but it's probably to keep hiking every second meeting until they have a reason not to, or a reason to hike quicker. They're going to keep watching the data, markets and trade to see how it all shakes down.
4) So far so good
"The economy is strong," was the first thing Powell said at the press conference. He was upbeat about growth throughout and he doesn't see many obvious headwinds or problems, aside from trade.
5) Long-term forecasts don't matter much
Powell said higher long-term dots reflect optimism about the economy among FOMC members but that forecasting out two years is tough, they're going to take it a meeting at a time.
Overall, it's a hawkish statement because there was a risk of some kind of signal of a pause. Powell was upbeat about wage growth and the economy and even though accommodative was removed, he made it clear that's not a signal about stopping hikes any time soon.