To Our Clients and Consultants:

Yesterday the bond market traded off on details released from the most recent FOMC (Federal Open Market Committee) meeting. The bond market most likely reacted to two sections in the report. The first detailed the Federal Reserve’s communications and subsequent market reactions. Basically, the market previously interpreted little chance of a rate move in June and a low trajectory of further moves. Fed members felt that given the improvement in financial conditions over the previous months market projections had become a bit complacent. The second section detailed the possibility of a hike in June pending positive data with varied opinions around whether the information would provide a “clear” signal. The committee was really looking to add flexibility in our opinion.