The Pause That Doesn't Refresh?

So the Fed made no commitment. On the one hand, it decided that perhaps the economy was slowing down fast enough. On the other hand, it isn't sure and wants to wait and see.

Now, that could be good news or bad. And that's the bad news: the market is again unclear and will be anxious over every report.

The problem is that the Fed isn't saying which inflation it cares most about: the one with energy or without. Energy driven inflation is up and going higher: manufacturing wants to raise prices and services already are. Labor driven inflation is mostly stable: unemployment up a bit, productivity up - all things that do not drive up inflation.

So that's a recipe for market swings.

Meanwhile, there is a subtext - the Fed thinks that we have peaked. Time to think bonds and counter cyclical stocks.

The market was bound to act petulant. Nobody got exactly what they wanted. Doom-and-gloom types feel that stopping the hikes signals that we might have gone too far, and that a market peak means disappointments ahead. Bulls are pissed that they didn't get a clear sign that the rate hikes have stopped.