June FOMC statement came this afternoon and the report took away all the sizzle that was being expected by the market. One interesting thing in this report is Fed has come to an understanding that it has and will be deploying all the tools to keep economy from falling into a depression.
Fed has mentioned that growth rate fall has slowed down a bit. It has taken some comfort from how its monetary policy is helping the economy. Fed is still on it target to make its purchases related quantitative easing. Also fed has come to clear conclusion that lower fed fund rates will be there for a long period.
These things have clearly confirmed the hikes that are being priced by the market are incorrect.
so what next in terms of trading with in rates space. Expect a clear range bound market with falling volatilities in the front end. Long term rates have some room to rise but they will fall in the medium term.
tomorrow i will post some trades. BTW, i have been playing with IBM condor and so far this trade has done well (as of today it has made 1000 dollars profit).
Good Night
Chandra Khandrika
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