The Fed’s unanimous decision to not raise rates today and subsequent comments from Fed Chair Powell set markets soaring. The “contrarian” dynamic is alive and well: The Fed delivered “bad” news (the case for raising rates has “weakened” due to global growth concerns such as Brexit, China’s economic slowdown, etc.) and markets cheered as that will keep rates from rising. Interestingly, the Fed asserted its independence, denying they are bowing to political pressure and insisting these moves are “data dependent”. An unprecedented separate statement on the balance sheet seemed to be a nod to the market concern that “quantitative tightening” (the gradual selloff of Fed assets such as Treasuries and Mortgage Securities) is not on “autopilot” but is also data dependent. Futures markets now predict no new rate increases this year and even a rate decrease for next year. The 10 year yield dropped to 2.67%, nearing its recent bottom of 2.56%….Stay tuned. By David R. Pascale, Jr. , Senior Vice President at George Smith Partners