Economic analysts who expected the Fed to give some sort of indication as to when they will raise short-term interest rates were disappointed yesterday as the FOMC meeting statement released in the afternoon made no direct references to the timing of the first rate hike. The statement did, however, say that the Fed is seeing some "solid" data in job gains which prompted a hawkish interpretation by some analysts who believe positive employment numbers will lead to a rate hike in September. Most analysts, however, seem to be reading yesterday's statement as neutral (or even dovish - no rate hike yet!). The Fed's rhetoric continues to reiterate that the timing of the first hike will be dependent on economic data. If the economy weakens between now and the next FOMC meeting, the Fed may have a good excuse to delay the hike into the end of the year (or even into 2016).
The broad stock market rallied strongly into the FOMC statement release at 2:00 PM and, after a nervous surge and dip, continued to rally with the DOW closing at 17,751 and a 121 point gain. So Wall Street, at least, seemed to like the Fed's statement. This was good for the long position we entered early on Wednesday. Hopefully, this bullish enthusiasm will now buoy equity markets through the end of the current reversal zone (early next week).