After the Fed - November Meeting

We've just had the Fed statement and press conference. Here's some of the highlights below. 

*FED SAYS TAPER STARTING NOVEMBER, MONTHLY REDUCTIONS OF $15B *FED SAYS PREPARED TO ADJUST PACE OF TAPER AS WARRANTED *FED: INFLATION ELEVATED DUE FACTORS EXPECTED TO BE TRANSITORY

The Key Thing I've noticed though is that they are now saying "expected" to be transitory. This is a change, there's less certainty in their tone of voice. That said, the risk language still emphasises the risks to the downside rather than the upside. This was particularly true over the path of the pandemic. 

No surprises so far...

Press Conference Highlights: 

Most Recent
	03 Nov - 18:32:07	RTRS		FED'S POWELL: WITH COVID RECEDING, ECONOMIC GROWTH SHOULD PICK UP THIS QUARTER

Most Recent
	03 Nov - 18:35:00	RTRS		FED'S POWELL: WE THINK OUR ECONOMY WILL ADJUST TO SUPPLY AND DEMAND IMBALANCES AND INFLATION WILL RECEDE

Most Recent
	03 Nov - 18:35:38	RTRS		FED'S POWELL: IF WE SEE SIGNS INFLATION IS MOVING PERSISTENTLY BEYOND LEVELS WE WANT, WE WILL ADJUST

My own take is that most of the moves from today will reverse by the next Fed meeting which will probably be more of a driver of inflation expectations and when we get a new set of dots. Note that Powell did say very clearly that asset purchase decisions have no implications for rates. 

*POWELL: ASSET BUYS DON'T IMPLY SIGNAL ON INTEREST RATES

We had a couple of interesting comments on wages with Powell saying there's no evidence of a wage price spiral. 

Implications for markets: 

I'm pretty content with the market reaction following (thanks BBG TV for the below) seems fair with weaker USD and was kind of the reaction I expected. Gold with a slight lift post meeting. I guess we'll have to wait and see how the inflation shift in view plays out. But I wouldn't be surprised to see a reversal of a lot of these moves in the hours / day to come.