Marc Pado Fed Quotations

Had it not been for the impressive January same-store sales reports, decent forward-looking statements and the big drop in energy prices, the market drop would have been far worse. With the understanding that we needed to keep our eyes on wage pressures and productivity, both of those components suddenly soured investors on the idea that the Fed was truly done.

The 10-year has been trying to anticipate the fed funds rate. As soon as (Fed policy-makers) made it clear that they weren't going to stop at 4.75 percent, there was a big jump.

Even though the figures were revised slightly lower, investors were relieved because the data won't provide the Fed with an excuse to continue raising rates past January.

Every time investors think the Fed is going to be one-and-done, they rally the market 100 points. Yesterday was no exception. The potential for an additional 25 basis points in June faded from over 50% to about 28%. That gave the market the added juice it needed to penetrate serious overhead supply.

Yields, especially on the long end, have been dogging the market in recent weeks. And retail sales down more than expected shows enough of a slowing to question whether or not the Fed needs to continue to act.

Those very short-term support levels were broken yesterday, but the supports under the current levels are substantial. Now that the Fed has made it clear that we will see one if not two more rate hikes, the uncertainty has been removed. We expect the focus to shift to first-quarter earnings results, and they are expected to be good.