The Fed statement claims desire to raise Fed Funds yet they switched from extreme bullish to raises to now data dependent . Most vital words to the data dependent switch is reinvest proceeds and acommodative policy. Accommodative policy or easy or loose money is why the statement stated long run interest rates will trade below what is expected to prevail in the longer run.

Expected to prevail refers to the Natural Rate of interest which means the FED is not hitting this point in raises anytime soon, possibly many years, if ever, in the future. The Natural Rate today I suspect without running new data is in the 1.50 vicinity. This number was based on the August 20 year average which I believe is far to low because its only 50 basis points from current levels. My speculation is easily 2.5 to 3.0. The key to determine exactly is to run 30 to 50 years of Fed fund data. What the Fed informs is they lack ability for multiple raises and a point I' wrote many times because Fed Funds at 0.91 is skyrocket overbought. A 0.91 overbought means all Fed interest rates are overbought.

Why data dependent and why the low Natural Rate is the Fed is unwilling to allow the balance sheet to diminish. This means economic conditions years in the future will underperform as the FED can't have it both ways. Accomodative policy informs this will be the case. Improved economic conditions and Fed raises runs counter to Accomodative and money in abundance as policy. Current Primary credit at 1.50 hardly allows consumers to purchase houses and autos nor can Loan growth be expected to rise.

What changes current policy is Trump must replace the Keynesians on the board and install Supply siders especially if Trump is to gain any economic advantage to tax cuts. Tax cuts under accomodative policy is a short term band aid and will outlive its effectiveness.

The remainder of the statement is smoke as is the tools to inform 80% chance of raise in June.

EUR/USD. Topside level for today is located at 1.1316 and not expected break as EUR/USD hits its limit at 1.1261 and 1.1287. Longer term supports are located at 1.1102 and 1.1150. A break of 1.1204, targets 1.1191 and again 1.1176.

USD/JPY. Vital points are located at 111.32, 111.58 and 112.11 and 112.59.

USD/CHF. Vital points 0.9690 and 0.9712 Vs 0.9737 and 0.9759.

USD/CAD. 1.3350, 1.3380, 1.3415 and 1.3445.

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