Firmer After Fed

T-Notes little changed at the re-open dealing around late NY levels, +0-02 at 132-05.

• The contract traded to best levels of the day (but remained within the confines of the recently observed range) on Wednesday as the FOMC hammered home its stance, leaving monetary policy settings unchanged, "marked to market" its economic assessment and reiterated its view re: the transitory nature of the current inflationary impulse. Fed Chair Powell stressed that "it will take some time before we see substantial further progress," referring to the Fed's bar for starting to taper its asset purchases from the current level of US$120bn a month. "We've said we would let the public know when it is time to have that conversation. We said we would do that well in advance to the decision of tapering," he noted. The cash Tsy curve bull steepened on the day, with the belly of the curve leading as 5s richened by ~3.0bp.
• Focus now moves to U.S President Biden's address to a joint session of Congress (scheduled for 21:00 ET), which will centre on his $1.8tn family plan proposal, covering areas such as education, child care and paid leave for workers. The broader details and some snippets from the address have already crossed, which should make for a relatively sanguine affair for broader markets. A reminder that Japan is closed for business today (and will also be closed Monday-Wednesday next week), which will keep cash Tsy markets closed until London hours & sap liquidity from the Asia-Pac timezone.