You got me. The Fed statements were....shall I say very dovish. In fact, I heard substantial commentary that the Fed came out unexpectedly dovish. My view is that the Fed talked down the dollar overall, with immediate market results. Perhaps the Fed took a page out of the ECB's play book, is what it looks like.
What disturbs me is how equities went wild on a fatter hog rally. Reality is, the Fed will not be pumping more cash into this system. The ECB will be pumping cash into the euro system. How does that cash translate into U.S. dollars given the current trade difference of currencies between euro and U.S. dollar? Not like it used to be.
People that make a living off this stuff will have to play the game. In the mean time, I recall Chair Yellen saying equities aren't BEYOND historical norms. Does it really take pricing beyond historical norms to prove a problem? Prevention of bubbles is the first teaching to learn. Second is deflate the apparent bubble in order to prevent an explosion.
Certainly a bubble was occurring with the U.S. dollar. That was talked down today by the Fed, and good work. That is the best thing I can take out of the historical message. Otherwise, it's bid up on other asset's high prices.
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