Fed Chair Yellen didn't do much to change hawkish optimism with her discussion Friday afternoon. I would not say it was everything that FOMC hawks wanted to hear. But it did not undo the sentiment that rate hikes could come soon. But June? I don't see that in Fed Fund futures. The gold and U.S. Dollar Index chart both traded outside their trading ranges post-event.

August gold sank to February lows and the June U.S. Dollar Index has rallied to highs we haven't seen since the end of March. The market is saying something here: We get it FOMC. You're gonna hike rates this year.

Daily Gold Continuous Contract [Aug 16] COMEX

Daily U.S. Dollar Index Continuous Contract [Jun 16]

It's a mixed bag though. The Dow and June Fed Fund futures are not reacting as sensitively as gold and the greenback.

Daily 30 Day Federal Funds [Jun 16] CBOT

Daily E-Mini Dow Futures ($5) Continuous Contract

If these four charts were in sync, we'd see June Fed Funds futures through 99.40 (at a minimum!) and the Dow reverse from the current resistance area between 17,855 and 17,870.

We all can have a narrative about the hikes. I would be ignoring the price action if I didn't say that the market is expecting one .25bp hike this year. More than that and I would have to see a Fed Funds contracts trading below 99.15. If the FOMC looks across the markets, there is no way they can say that the market is getting the *hint*. Fed Chair Yellen is a dove's dove. She likes to project well-ahead of moves. If that is still her goal there are only two takeaways. The FOMC may hike in July or September (likely the latter) or she's got some work to do on her June 6th speech in Philadelphia. She's got to paint a clearer picture because it's still out of focus.

The timing of the speech will be perfect. It will be after the NFP and give her a reason to showcase an improving labor market justifying a hike or...

She can use it to back off June. Either way, it will give the market a week to adjust before the June 15 live FOMC meeting.

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