Fed Day

Last night I posted a chart of BTC asking if the rally was done. I don't think it is done, but I do watch BTC as an indicator. It has since bounced off support. The S&P 500 and Nasdaq 100 both tested their 50-day moving averages yesterday and bounced.

Long-term government bonds strike me as one of the cleanest long trades because they win in most scenarios. I do not expect a Fed pivot now, but bonds will benefit if the Fed reduces hawkishness by talking about data dependence, which could come in Powell's comments after the meeting rather than the FOMC statement. If the Fed surprises with a 100 basis point hike, I expect that will be even more bullish for long-term bonds as that market prices in recession or worse. Short-term though, what is priced in? I wouldn't be shocked if bonds sold off sharply following a positive Fed announcement because the bond market has already been pricing in some type of pivot.