Rates reversed their direction after the FOMC released its decision on rates. The FED left the short term Fed Funds rate unchanged as unanimously expected. The summary of the FOMC meeting is what impacted rates.

The bond market ultimately did not respond to what was said, but what was unsaid. The FOMC omitted a crucial clause that was viewed as signaling a tightening bias. In short, they are no longer saying that they are more likely to increase rates, then decrease rates.

The 10-year Treasury initially spiked up as analysts read the FED said its key policy concern "remains the risk that inflation will fail to moderate as expected." At that point the 10-year Treasury went to the days high at 4.591%.

Then as analysts read on they noticed what was conspicuously absent; the bias toward tightening. The 10-year Treasury did a ‘180’ and rates moved lower. The 10-year Treasury closed -.029% moving the rate to 4.518%. That is a .073% intra-day move.

The FOMC statement was short, even for the summary. Here it is in its entirety:

“The Federal Open Market Committee decided today to keep its target for the federal funds rate at 5-1/4 percent.

"Recent indicators have been mixed and the adjustment in the housing sector is ongoing. Nevertheless, the economy seems likely to continue to expand at a moderate pace over coming quarters.

"Recent readings on core inflation have been somewhat elevated. Although inflation pressures seem likely to moderate over time, the high level of resource utilization has the potential to sustain those pressures.

"In these circumstances, the Committee's predominant policy concern remains the risk that inflation will fail to moderate as expected. Future policy adjustments will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information.”