While you were sleeping September 22nd

Either the market did not like the Fed decision or is still thinking about. Although largely expected and thus priced in the Fed decision had a negative impact on the market. My view is that the “market” just got confirmation of the second recessionary period in this crisis.

The market responded accordingly as you can see from the charts below. Also, one more thing might have played a role here. Thorough the new operations the Fed is increasing short term yields and lowering long term ones, i.e.flattening the yield curve. If you were to believe the term structure story than such a reaction implies a tightening from the FED. Surely it cannot be as that would be utterly crazy.

US

And Asia

Commodities

EURUSD

US Yields

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