July FOMC Decision and Market Moves Largely in Line with Expectations, but There Is Much to Interpret (More to Critique).

English summary

(1) The key takeaway from the statement is the three dissents, with all qualitative descriptions of the economy unchanged. Dissents are at historical highs and all come from regional bank presidents, showing the committee's consensus-building while indicating Warsh still needs to consolidate leadership over the regional banks. Watch Waller's upcoming remarks; if Waller also turns hawkish, it would be a significant tightening signal (see Waller's latest speech: 'Monetary Policy at a Crossroads'). (2) Broad asset performance reflects 'easing trade'. The surprise policy easing caused a bear steepening in USTs (too much easing raises long-term inflation expectations), while the dollar and gold typically price off short-term rates. U.S. stocks rose then fell, pressured by higher long-end Treasury yields, but earnings and fundamental AI factors are the main drivers. Interpretation: For short-duration assets, temporary positives are still positives; for long-duration assets, delayed negatives are still negatives.