We entered the Fed meeting today expecting no surprises.  I would point out two statements that surprised me:

After three rate cuts in five months, and over $300 billion of asset purchases, Powell described monetary policy at this point as only “somewhat” accommodative.

Statement #2:  Remember Powell’s statement this summer that rate cuts were simply a “mid-cycle adjustment” (i.e. a reset in a longer term hiking cycle)?  It made Powell sound like he was in denial about the Fed’s mistakes of the prior year.  The markets didn’t like it.  Today, he walked that back by saying, “need for rate increases is less than it was in the mid 1990s cut cycle.”

Bottom line:  We were expecting a “we’re on hold, nothing else to talk about” tone from the Fed.  But we got a more dovish Fed communication.

You could argue that this all indicates that the Fed has no confidence that the global trade wars will be resolved.  I would argue that they now (finally) understand, given the persistently subdued inflation data, that the downside risks of being overly easy are less (maybe far less) than being overly tight.  The latter, the markets should like.