The FED stays on hold, but with a catch

Yes, the FED stayed in their seats doing nothing for another six weeks. The FOMC meetings for 2016 are running out so the promise for 2-4 rate hikes this year looks like a total mockery.

The BOE (Bank of England) has these unwritten rules that the board (MPC) members don´t speak in public for a week after another member has spoken, they don´t contradict each other, there should be a period of silence before and after the chairman holds a conference etc, which doesn´t seem to apply to FED members. Remember at the beginning of 2016 when they called for 2-4 interest rate hikes this year? We won´t even see 2. 

But, in their defence, very few expected a rate hike today. So they left the rates unchanged and obviously the initial reaction of the USD was a 40-50 pip drop. Remember, I wrote in our last update that if the rates didn´t change the USD would lose about 50-200 pips. That´s the first part of the story according to our plan. 

The second part comes after this initial move unwinds. It might be next hour (although the US markets will close soon), it might be tomorrow or in a few days, but when the traders realize the rate hike is coming then the second move will take place.  

The material in the FOMC statement clearly indicates that the next rate hike is near. There were enough changes there to make us believe that December will be the month. But, we will go into details tomorrow.