Apparently it took the 9:30am NYSE opening bell ringer for stocks to truly realize what just happened.  The Fed announcement on Wednesday was their way of saying "sorry" to stocks for the "steady as she goes" approach to tighter monetary policy in December.  As of Wednesday the Fed's median outlook for the Fed Funds Rate is now half a point lower for 2019-2020 and whereas Powell said in December that the balance sheet runoff was on autopilot with no reason for that to change, the just-announced change has the Fed completely doing away with balance sheet runoff on October 1st, and taking a $15bln/mo bite out of it starting in May.

So just to be clear... that's by far the biggest downward adjustment in the Fed's rate hike outlook we've seen in more than a decade followed by what will end up being an extra $40-50 bln a month in bond buying come October.  Yep!  It makes sense to see bonds at the best levels in a long time!

What didn't make a ton of sense was the fact that stocks initially rallied yesterday only to drop back to pre-Fed levels by the end of the day.  The bewilderment continued overnight as S&P futures fell to even lower levels.  But at 9:30am, the countdown was complete and the launch sequence began.  Stocks leaped to the best levels since early October, finally distancing themselves in a convincing way from the technical ceiling in the S&P (2815) that had was just starting to break this week.

If nothing else, bonds can hang their hat on the fact that they didn't lose much ground today even though investors were looking for more and more couch cushion money to throw into stocks.  10yr yields held below their own important technical level at 2.55% and MBS scratched out a modest victory with Fannie 3.5 coupons hitting 101.00.