NASDAQ futures dropped hard after the 2pm Minutes showed most Fed Policymakers viewed it ‘likely’ they would raise interest rates in June.
The verbiage spiked the probability of a June rate hike up over 30% per the Fed Fund futures. Before the announcement the implied probability was just over 25%, see below:
After the minutes:
The NASDAQ is now in a neutral print. Look for buyers to work price back up the mean:
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Wow, there’s some credibility for you. Their own minutes say “likely” and that rates only a 30% probability…
‘Look over here’ says the Fed, we’re going to raise rates!
(Don’t look over there at the flattening yield curve, means nothing).
Note TLT movement – FED hikes, long bonds dropped as I theorized last night (early morning?). The FED can sink stocks AND the Ark at the same time…
At least HYG went down in price with TLT, but that’s different than the price action I saw earlier this year.
I puked up the TLT I was holding since February for virtually no gain, as the reactions to FED hikes has been unfavorable. I did buy some TLT calls, because todays’s move was overdone.
Well at least you got a dividend and arnt flat/down for the year like most stocks.
I bot a few treasury future options as well