A Touch Flatter When The FOMC Dust Settled

T-Notes hovering around late NY levels, last +0-06+ at 134-15. The contract finished Wednesday's session just shy of late NY highs after initially trading lower in the wake of the release of the latest FOMC statement. The statement erred on the hawkish side, with the Fed noting that the "economy has made progress toward these goals, and the Committee will continue to assess progress in coming meetings." The Fed also noted that indicators of economic activity and employment have "continued to strengthen," rather than prior statement's simply "strengthened."

• Powell then reinforced the Fed's well-travelled underlying message in his post-meeting press conference, as he noted that "we have not reached substantial further progress yet," Chairman Powell stated in his Q&A session, "we see ourselves as having some ground to cover to get there." This allowed Tsys to recover.
• The Fed also announced the establishment of the Standing Repo Facility (SRF) and made a permanent facility available for offshore names, in the Foreign and International Monetary Authority facility (FIMA repo).
• The curve finished a little flatter on Wednesday, with paper out to 5-Years virtually unchanged come the bell, while the longer end richened by ~1.5bp.
• Outside of Fed matters, the bipartisan group of Senators negotiating an infrastructure pact came to an agreement, with a vote on the procedural step surrounding the matter due this evening. There is a lack of tier 1 risks events slated during Asia-Pac hours, while Thursday's U.S. docket will be headlined by the advance Q2 GDP print and 7-Year Tsy supply.