FOMC flush

With investors hyper-focused on the Federal Reserve and its reaction to economic developments, there were notable reactions to Wednesday's FOMC decision. Stocks, inflation-linked bonds, and gold all dropped with losses of at least 0.5% in the SPY, TIP, and GLD exchange-traded funds. There have been four other times when all three funds dropped at least this much on a FOMC day (2005-03-22, 2013-06-19, 2014-03-19, and 2016-12-14). SPY showed a negative return sometime between 1-4 weeks each time but was higher two months later after all four. TIP continued to drop in the very short-term each time, but rose over the next month every time averaging 1.7%. GLD dropped over the next week each time by an average of 1.5%. Three of the four struggled up to two months later, with only the 2016 instance showing gains.