Market starting to lose faith in the FOMC, says Janus Henderson's Michael Contopoulos

Summary

Fast Money traders react to the Fed decision, with Janus Henderson's Michael Contopoulos arguing the market is losing faith in the Fed as strong growth and high inflation drive a bear steepening in Treasuries. Other participants note the dollar's weakness, gold's rise, and the potential for balance sheet action, while debating the limited impact of rate hikes on supply-driven inflation.

• Fed decision leaves market with little forward guidance, raising concerns about September.
• Market reaction: dollar weakens, gold rises, signaling the Fed is behind the curve.
• Michael Contopoulos says the market is starting to lose faith in the Fed.
• Contopoulos highlights a bear steepening in Treasuries driven by strong growth and high inflation, with long-end yields selling off while the two-year is flat.
• Tim suggests the Fed may now have to address its balance sheet instead of hiking rates.
• Karen relays that the Fed is comfortable letting higher long-end yields do the tightening work.
• One participant argues that 75bp hikes have minimal impact on supply-shock inflation, limiting the Fed's options.