Dan Passarelli, CEO - Market Taker Mentoring

Today was the big day when Jerome Powell and his buddies announced at the big Fed announcement how much they were raising interest rates. About a week ago it was looking like it was going to be 50 basis points. Today it looks almost certainly to be 75 and there was no surprise. And that is the topic of today's video.

I said in a video a few days ago that if the Fed came in right on target, what I think would be the most likely scenario is for the market to rebound a little. Even if they raise it 75 basis points, that the market would probably rise just a bit, being the most likely scenario. And that's what happened.

Let's go back on that logic and see why it played out that way. First of all, making the announcement and having it come out as expected as everyone was talking about, the market doesn't really like surprises and in fact, the market likes NOT surprises.

It's two different statements there and they're both important. Further, after the Fed announced the 75 basis point rate hike, they said that going forward they would either raise it 50 basis points or 75 basis points. Now, I believe that just giving that guidance and having everything come in line with expectations takes the jitters out of the market. Granted, the VIX fell about 10% today; it's below 30 and I think it's probably likely the VIX will start to come down a little bit. I don't think we'll see it south of 20 for a long time. It'll probably come off a little bit tomorrow, or on Friday.

Now that we have some visibility. Now that the Fed was openly talking about their expectations; kind of acknowledging they sort of had it wrong before and that they are going to do what needs to be done to fight inflation. It sounded a little bit more informed and open and believable and that's the thing that's good for markets.