Three remains the number of times the Fed thinks it will most likely raise rates this year in total, and again in 2018. Together with the absence of any reference to when balance sheet shrinkage might commence (either in the FOMC statement or in Janet Yellen’s press conference) and a view that inflation – currently described as below target ex-food and energy – is likely to stabilise around 2% over the medium term rather than move above, marked out the Fed affair as slightly more dovish than some were positioned for going in to the FOMC pronouncements. The dissent of one FOMC member, Neel Kashkari, in favour of no change today was noted though really no surprise. The Fed wasn’t dovish per se, but with near record short speculative positioning in the US interest rate futures markets, and an expectation that if the Fed was going to do anything today with the ‘dots’ it would be to ratchet three up to four for either this year or next, markets really only had one way to react. Hence 10yr yields are down some 10bps (to 2.498%) and 2s down 7 bps.