This afternoon the Fed released what was widely characterized as a "dovish" statement. In response the all important 2-year note rallied by 2 basis points, the 10-year note closed just below 2% and the dollar declined modestly. All of this is consistent with the dovish tone of the Fed's statement.
However stocks sold off sharply with the S&P 500 down 1.1%. What gives? The answer is simple. All too many stock market participants continue to believe that Janet Yellen is their fairy godmother. They expected the Fed to be even more dovish. I hate to disabuse them of that notion but nowhere in the Federal Reserve Act does it say the Fed was put on this earth to support the stock market.
Meantime it looks like a March Fed Funds hike is off the table, but given the good data that I expect, June will be a very real possibility.