Fed dialing back jobs growth optimism

Commuters at Canary Wharf underground tube station
Chris Ratcliffe | Bloomberg | Getty Images
Commuters at Canary Wharf underground tube station

The Fed statement was essentially unchanged. The FOMC did dial back jobs growth language, noting that "the pace of improvement in the labor market has slowed while growth in economic activity appears to have picked up."

Six Fed officials now expect only one rate hike this year. The futures, meanwhile, are only pricing in an 8 percent chance of a July rate hike.

The dollar dropped, gold rallied modestly and bond yields dropped. The S&P is unchanged. Bank stocks, sensitive to interest rates, dropped one percent from their highs, but recovered half of those losses fairly quickly. Most bank stocks remain up on the day.

There was no mention in the statement of "Brexit," though the Fed once again acknowledged it would take into account "readings on financial and international developments." In the press conference Yellen acknowledged that Brexit was "one of the uncertainties we discussed and factored into today's decision."

Once again, the influence of the data is being skewed from meeting to meeting. What's confusing to everyone is, it's not clear how much weight the Fed is putting on external forces (Brexit, China, etc.) versus internal forces (jobs and inflation).

You just don't know. And that gives the appearance that the Fed is making up things as they go along.

Art Cashin's suggestion — that the Fed should announce a press conference for July (none is scheduled) — was not taken up.

  • Bob Pisani

    A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

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