Thoughts on the Fed Announcement... such as it was...

Today's FOMC release was quite the snoozer. There was very little changed from the March statement.

• In today's statement, the FOMC said that "economic growth had slowed" which seems like a downgrade from "recent indicators have been mixed." But I read this as merely an acknowledgement of the meager 1Q GDP figure. They can't come out and talk about "indicators" when our most recent actual growth figure was sub 2%.
• However they used the exact phrase: "Nevertheless, the economy seems likely to expand at a moderate pace over coming quarters." I think using this exact phrase in both releases negates any perceived downgrade from the first sentence.
• The second paragraph on inflation is substantively the same. The only change seems to be cleaning up some wordiness. Nice to see the Fed cares about good grammar too.
• The final paragraph is exactly the same: "In these circumstances, the Committee's predominant policy concern remains the risk that inflation will fail to moderate as expected. Future policy adjustments will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information."

I had read the March statement initially as dovish, but evidence from the actual minutes showed that I was wrong. The Fed is still worried about inflation, housing market be damned. Ultimately I still think their next move is a cut, but now its very hard to imagine that cut coming before December.

The curve should invert more, and we should test the -20bps 2-10 slope. I'd also see us testing the 10-year at 4.75%.