To The Moon

The Federal Reserve hiked 25 basis points to bring the federal funds rate to 5.0% to 5.25%. The statement softened from its March statement that went from "additional firming" to "it will closely monitor incoming information and assess its implications to determine the extent to which additional firming may be appropriate to return inflation to 2 percent over thme."

During the press conference, when journalists asked about a potential pause in the next meeting in June, Fed chair Jerome Powell didn't really want to let the cat out of the bag. 

"It will take time for full monetary restraints to be realized," Powell said. Credit tightening had already been taking place over the past year and the strains that resulted in the banking are likely to lead to further credit tightening, Powell said.

Because of the increased credit tightening from the banking stresses, the Fed won't have to raise rates as high as it might have without the stress.

"Support for the 25-bp rate increase was very strong across the board," Powell said. There was some talk of a pause, but not for this meeting, he added.

Initially the market reacted positively during the start of the press conference, but as it went off the market started to sell off. The Nasdaq composite ended down by -0.5%, while S&P 500 was down -0.7%, and the Dow finished down -0.8%.

All 11 S&P sectors ended in the red, with energy leading the decline, losing 1.56%. Oil prices fell to $68 per barrel.

Volatility is expected to remain as there is much uncertainty of hike or pause. Until the next meeting in June, it is very possible the S&P 500 could retest the 3800 level again.

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@TigerStars