A market snapshot from the FOMC decision to the end of Warsh's press conference

What shifted between just ahead of the FOMC decision and the close of the Fed's Warsh press conference at 3:04 PM ET? Comparing the two moments shows a clear market response:

1. The dollar was lower against every currency on the list,
2. Yields on shorter-dated Treasuries declined while longer-dated yields rose, leaving a steeper curve, and
3. Stocks ended up mixed.

Both the decision and the press conference are wrapped up in these changes.

Treasury yields: a sharp steepening of the yield curve.

• 2-year: 4.7702% to 4.7182%, lower by 5.20 basis points.
• 5-year: 4.8764% to 4.8657%, lower by 1.07 basis points.
• 10-year: 5.0196% to 5.0466%, higher by 2.70 basis points.
• 30-year: 5.3178% to 5.3707%, higher by 5.29 basis points.

The 2-year/10-year spread broadened to 32.84 basis points from 24.94 basis points, a steepening of 7.90 basis points.

My judgment: the short end points to less pressure for any immediate tightening after the hold and Warsh's patient tone. But the long-end rise makes clear this was not a bond rally across the curve. By themselves, the price moves cannot settle whether inflation worries, growth expectations or term premium drove the long end.

Currencies: the dollar was sold broadly.

• EURUSD: 1.1135 to 1.1156, up 21 pips, or 0.19%.
• USDJPY: 158.27 to 157.92, down 35 pips, or 0.22%.
• GBPUSD: 1.3297 to 1.3324, up 27 pips, or 0.20%.
• USDCHF: 0.8295 to 0.8283, down 12 pips, or 0.14%.
• USDCAD: 1.4036 to 1.4013, down 23 pips, or 0.16%.
• AUDUSD: 0.7035 to 0.7055, up 20 pips, or 0.28%.
• NZDUSD: 0.5619 to 0.5629, up 10 pips, or 0.18%.

My judgment: dollar weakness was the most consistent theme among the markets shown, and the Australian dollar put in the biggest percentage advance versus the dollar.

The New Zealand dollar comparison also amends the impression from the daily figures: NZDUSD was still sharply lower on the day, but it gained ground over the decision and press-conference window.

Stocks: technology outperformed, while the overall response was muted.

• Dow: 52,566.27 to 52,489.26, down 77.01 points, or 0.15%.
• S&P 500: 7,744.33 to 7,743.73, down 0.60 point, or 0.01%.
• Nasdaq Composite: 26,479.73 to 26,528.74, up 49.01 points, or 0.19%.
• Nasdaq 100: 29,707.82 to 29,778.65, up 70.83 points, or 0.24%.
• Russell 2000: 2,821.8249 to 2,818.4355, down 3.3894 points, or 0.12%.

My judgment: the response was narrowly based. Technology advanced, the S&P ended essentially where it stood before the decision, and the Dow and small caps retreated. Several indexes' positive daily closes therefore overstate how strongly markets reacted to the Fed.

The press conference and markets, read together

Warsh stayed firm on the 2% inflation objective, while his belief that policy is working — and his sense that robust growth need not mean overheating — gave the Fed room to hold off. Whether said or not, the reality is that the election is next week, and nobody, apart from possibly two dissenters who may want to register a bias, wants to stand in the way of any discussion of manipulation.

The clearest market evidence for that view was the 2-year yield's 5.20-basis-point drop and the broad dollar decline. At the same time, longer-dated yields moving higher and equities finishing unevenly suggest investors did not read the message as an unlimited go-ahead for risk.

The policy conclusion remains a hold-and-assess approach, with another hike possible should inflation disappoint. What markets are showing is less urgency for tightening, not an imminent set of cuts. Odds of a December hike are about 82%.