Before we get to the main event, we note that during the Congressional hearings this morning, JPMorgan CEO offered a reality check for policy-makers and pollyannas:

The Fed hiked 75bps (as expected) but drastically shifted its rate trajectory expectations in a hawkish direction...

Powell's press conference offered some hope for bulls (data dependent), but he did warn and admitted that it is

Senator Warren jumped on that fast:

.@federalreserve's Chair Powell just announced another extreme interest rate hike while forecasting higher unemployment. I've been warning that Chair Powell's Fed would throw millions of Americans out of work -- and I fear he's already on the path to doing so.

-- Elizabeth Warren (@SenWarren) September 21, 2022

For good form, and to offer the algos some hope, Powell reiterated that The but as a reminder, the dot-plot tells you what The Fed members' forecasts are and they don't see any 'easing' anytime soon.

Ha-ha, you fool! You fell victim to one of the classic blunders, the most famous of which is "Never trust the post-FOMC kneejerk reaction" pic.twitter.com/mKTqS5Mo1A

-- zerohedge (@zerohedge) September 21, 2022

Finally, Jane Edmondson, CEO of EQM Capital summarized the precarious situation:

As Powell admitted "there isn't a painless way to get inflation behind us."

So where did the equity market end today (remember historically the 'day of' has been bid and the 'day after' offered)? The algos had it after Powell's "pause" comments but then he stole the jam out of the market's donut at the end of the presser by admitting that "the housing market may have to go through a correction."

All the majors closed at the lows of the day...

The S&P 500 broke back below 3800 - its lowest since 7/14...

Short-squeeze attempts were made at the start of Powell's Presser... but failed (for the 4th straight day)...

Bank stocks were pummeled after Powell admitted a housing correction was coming (and they weren't helped by the inverting-erer yield curve)...

Bond markets were just as jumpy with yield flying all over the place but settling with a major flattening of the curve as 2Y yields jumped 7bps and 30Y yields fell 8bps...

A dramatic flattening of the yield curve...

German yield curve 5s30s tumbled to the most-inverted ever.

UST yield curve 2s30s collapsed to its most-inverted since 2000

The 2s10s curve hit -52bps intraday, very close its most inverted since 1982 (during Volcker)...

2Y Yields topped 4.00% for the first time since Oct 2007 (hitting 4.11% intraday high before fading back)...

The dollar had another big rally day - after some flight to safety bid from Putin. The post-FOMC performance ended going higher but was very choppy...

The euro plunged further below parity with the dollar after Putin's comments... and went further on Powell...

Bitcoin ended the day unchanged, holding $19,000 after some wild rips and dips intraday...

Oil ended the day practically unchanged as the global war premium from Putin was erased by inflation-fighting fears...

Gold surged back up near $1700 - erasing the post-CPI plunge...

Finally, The Fed continued to rapidly adjust upward its 2023 (terminal) rate expectations...

And the market is now pricing in 75bps for November, 50bps for December, and 25bps for Feb 2023... pushing the terminal rate above 4.60% (and also sending subsequent rate-cut expectations soaring)...

Simply put, the market is calling The Fed's bluff in 2023 - pricing in rate-cuts (after The Fed triggers a recession) while The Fed still expects rates to stay higher for longer...

We leave you with this this take from Derek Tang, an economist at LH Meyer in Washington:

Just remember the mantra of the last decade -