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The #1 reason the Fed hike was a touch on the hawkish side

The Fed maintained projections for roughly four hikes in 2016

The hike was no surprise but if the Fed really wanted to underscore a 'dovish hike', officials could have scaled back forecasts for hikes next year in the dot plot.

The central tendency remains 1.4% (or 1.375%, more accurately). It would have been easy for officials to skew this lower and send a signal about patience. Instead, they are signalling (albeit softly) a rate hike each quarter.

The dollar is higher after the decision. However, I highly caution against trading on fundamental skews, especially ahead of Yellen.

I believe fast money was piling into US dollar longs yesterday and will be taking profits today. Flows and positioning are far more important than fundamentals here.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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