Editor's Note: This is abridged commentary from Hedgeye CEO Keith McCullough following today's Fed statement.
The decaying foundation of the already shaky Old Wall edifice took another major hit today. Make no mistake, it is crumbling fast ... brick by brick. The reality is that very few market pundits (or TV channels for that matter) prepared you for where you are today.
That’s a statement of fact.
My message? Stick with the 2.0 sources. Stick with the risk managers that warned you and helped you protect your hard earned capital. After all, if you've completely missed the mark on the last 7 months of this move, why would anyone trust you'll get the next 7 days?
Now... where do we come in?
Here's what I said in real-time just after the FOMC statement.
...Here's what happened.
So, what exactly happened today? For starters, this FOMC statement was nowhere near as "dovish" as people we speak to were thinking it might be. In other words, our unelected central planners at the Fed didn't remove their "transitory" view of #Deflation (despite it being pervasive). This keeps the US Dollar strong and deflation intact.
The Fed is in a box. So, keep doing what we have had you doing. That means buy US Dollars, buy the Long Bond (TLT), and sell stocks.
Here's what we said following the last Fed decision:
- USD would rise
- 10yr Yield would fall
- Stocks would fall
As the tape showed today, there is very low probability that any of those 3 Big Macro Trends above changed at all today.
This has been one of the worst January's ever for US stocks and it will likely end that way. By our calculus, "ever" remains a very long time. And while it may seem like a joke, Old Wall is begging for easing now.
I don't know how much longer The People will stand for Old Wall and its Media lying to them... but wow. Old Wall Consensus on the US economy is a certified train wreck. The truth is not that hard to see at this point, unless you’re compensated to be willfully blind to it.
Rest assured of one thing: we will never bow down to the conflict of interest of Old Wall or its media.
This Old Wall is coming down.