S&P 500 storm in a teacup
Markets were spooked by "hawkish" comments in the latest FOMC minutes, where some participants indicated a willingness to tighten policy should such action become appropriate:
Participants discussed maintaining the current restrictive policy stance for longer should inflation not show signs of moving sustainably toward 2 percent or reducing policy restraint in the event of an unexpected weakening in labor market conditions. Various participants mentioned a willingness to tighten policy further should risks to inflation materialize in a way that such an action became appropriate. ~ Minutes of the Federal Open Market Committee: April 30–May 1, 2024
This is nothing new: all FOMC members should be prepared to hike rates if inflation spikes to the point where tighter policy is appropriate. What seems to have spooked markets is the fact that it was considered appropriate to discuss this out in the open.
10-year Treasury yields rallied to test 4.5%, ending the series of declining Trend Index peaks. Breakout above 4.5% would signal another test of 4.7% but breach of support remains likely and would signal a decline to test support between 4.0% and 4.1%.
![10-year Treasury Yield](https://www.incrediblecharts.com/images/2024/2024-05-23-tnx.png)
The large engulfing candle on the S&P 500 is a bearish sign....
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