BMO: Fed Liftoff Debate More Relevant Than Tapering Exp. At This Stage

In the wake of the post-FOMC sell off BMO have noted that they "were encouraged to see the bulk of the move being led by the belly of the curve, which suggests the debate surrounding liftoff was more relevant than tapering expectations at this stage. Powell's observation that QE will persist until substantial progress toward the Fed's objectives is made was all too familiar – as was the follow up that such a milestone is 'still a ways off'. Why then did 10s and 30s also participate in the selloff? The short answer is that the Chair's comments did little to alter the market's perception of the tapering timeline. Confirming the pre-meeting Fedspeak, Powell went on to add that this was a 'talking about talking about' meeting – apparently there is a lot to talk about. Nothing in the statement or Q&A dissuaded the consensus: 1) Focus on Jackson Hole for unofficial guidance, 2) an official statement in Q4, and 3) reduced asset purchases in Q1 2022."