For the past 7 years Fed policies have been on “emergency” conditions.

The economy moved off that condition years ago but they’ve kept these policies in place.

Why? It’s due to pressure from Wall Street and the financial industry since the policies have led to stock market gains and easy terms to finance stock buybacks and M&A activity.

The Fed this day changed its language dropping worries about global economic conditions that may negatively affect the U.S. economy. That is considered “hawkish” meaning now they’re free to raise interest rates sooner. But Wall Street wasn’t buying it as stocks rallied post the announcement.

Nevertheless, after all this time, the Fed is still finding it difficult to normalize monetary policies. Bulls’ love and feast on their indecision.

U.S. stocks rallied sharply after an early bout (“the first move’s the wrong move”) of selling. On the other hand, overseas markets, especially emerging markets, still experienced selling as did currency markets and precious metals due to a rise the dollar. And as stocks rallied bond markets witnessed modest selling.

Market sectors moving higher included: S&P (SPY), Dow (DIA), Small-Caps (IWM), Mid-Caps (MDY), Financials (XLF), Energy (XLE), Materials (XLB), Retail (XRT), Semiconductors (SMH), Europe (VGK), Hedged Europe (HEDJ), EAFE (EFA), Japan (EWJ), Hedged Japan (DXJ), Russia (RSX), Canada (EWC), Crude Oil (USO) and so forth.

Market sectors moving lower included: Transports (IYT), Utilities (XLU), Consumer Staples (XLP), REITs (IYR), Emerging Markets (EEM), China (FXI), Shanghai (ASHR), Brazil (EWZ), India (EPI), South Korea (EWY), Taiwan (EWT), Australia (EWA), Asia ex-Japan (AAXJ), Philippines (EPHE), Thailand (THD), Indonesia (IDX), Singapore (EWS), Gold (GLD), Gold Stocks (GDX) and others.

The top ETF daily market movers by percentage change in volume whether rising or falling is available daily.

Volume improved given Fed announcement and breadth per the WSJ was positive.

A lot of the old rules we’ve followed as investors have fallen away given the interference and manipulation of markets by Fed policies. Even they have a sense they’ve kept “emergency” policies developed 7 years ago have long overstayed. Wall Street positive stock market results and so forth have pressured them to maintain these policies. The Fed does march to Wall Street’s tune after all. 

GDP Data is on tap for Thursday and it too has fallen to government manipulation. And so it goes.

Let’s see what happens.