On Thursday the US Fed meet and update their Fed Funds expectations (the dots)

On Thursday the US Fed meet and update their Fed Funds expectations (the dots). The last release saw interest rate markets sell off (yields higher) on the dots with the Fed then having to convince markets not to focus on them. The jawboning has been successful with the market now forecasting rates substantially lower than the dots. Employment and inflation data since March has done little to enable the FOMC to lower their respective projections. So the Fed is in a Catch 22: move the dots lower or taper their dovish rhetoric and let the market move yields higher. Of late, people close to Fed have suggested they are concerned the market is complacently placed which has seen rates move higher. We think the Fed may appear less dovish and as such interest rates will rise, having a dampening effect on equity markets. Our monthly report explores this further: (VIEW LINK)