It occurs, but it surely’s uncommon. A Fed “dot plot” day has come and gone with mortgage charges virtually completely unchanged from the day prior to this. This speaks to the extent of indecision not solely available in the market, but additionally amongst Fed members.
First off, what’s a “dot plot day?”
The dot plot (or just, “the dots”) refers to a chart/desk within the Fed’s financial projections that reveals the place every Fed member sees the Fed Funds Rate on the finish of the following few years. These projections solely come out on 4 of the 8 Fed days per 12 months and so they’ve grown to be a number one supply of volatility for monetary markets on these days.
Since it was already a foregone conclusion that the Fed wouldn’t be reducing charges at this time, the market was pressured to take its Fed-related cues from the dots and from Fed Chair Powell’s press convention. The latter was simply barely unfavorable for charges (i.e. it implied some upward stress), however the dots did no hurt. After the mud settled, the underlying bond market was flat to barely stronger on the day resulting from enchancment that was in place a number of hours earlier than the Fed announcement.
Markets are closed tomorrow for the Juneteenth vacation, however will reopen on Friday.
