FED FENCE STRADDLING CONTINUES

How do you paint yourself into a financial corner?

Head up a central bank and sport the name Janet Yelllen. That's pretty much what came from the  mouth the Federal Reserve oracle aka The Patient Lady Wednesday.

As we noted in Be Careful What You Prepare For, the market was overly long the dollar and painfully myopic about what doves really do--act dovish. We could add confused and clueless doves but we've already taken our meds for today.

And that poses another question: How does June morph into September months before Fall arrives? Simple. Just add another dot to the Fed's nonsensical dot plot scheme, one they didn't count on, in this case a weather dot to screw up the plot.

“Just because we removed the word patient from the statement doesn’t mean we are going to be impatient,” Ms. Yellen was quoted in the Wall Street Journal. Judging from the market's huge rally with the DJIA jumping 227 points to break through 18,000 on the index, it was an all clear ahead for now if you want to dump the dollar and load up on some low-yielding bonds and bloated equities.

Some might say the Fed left the punch bowl half full, opening the door for a possible rate hike but showing some real hesitation about crossing the threshold. At what point does caution become indecision and not caution?

The main point is the Fed reduced its inflation, interest rates and growth outlook given the perceived  slowdown in the economy.

Meanwhile, back at the Fed the fence straddling continues.