'No Change! No Change!': Another Maddening Wait for Wall Street

Most Important Two Minutes of the Fed News Conference
  • Traders were hoping Yellen would end the rate-hike suspense
  • `I feel deflated' sums up the disappointment in the Fed

“Are you freaking kidding me?”

The trader at Raymond James and Associates Inc. on Park Avenue in New York couldn’t believe it when the the headline flashed at 2 p.m. -- once again, Janet Yellen was holding the line and doing nothing. The Federal Reserve would keep interest rates near zero, continuing the easy-money era that began seven years ago.

On the crowded trading floor, every seat taken, the reaction to the most anticipated Fed Open Market Committee meeting in recent memory was, as one man in a crisp blue-striped shirt said in astonishment, “Wow.”

Whether traders were betting the Fed would act or not, they just wanted the wait to be over. The last time the target rate was raised was in June 2006, and since December 2008 it’s been near zero. The government stimulus that started after the financial crisis as a boon to equity markets turned to a burden in recent months as a lack of clarity on, and a lot of fretting about, the Fed’s plan for liftoff loomed over stocks.

“I feel deflated,” said Mark Koczan, a trader at Raymond James. “It’s just more kicking the can down the road.”

As the clocked ticked down to 2 p.m. at Oppenheimer & Co. on Broad Street in lower Manhattan, rows and rows of men and women, a few standing, the rest hunched over their computer screens, chattered in nervous anticipation. There were shouts of “Buy! Buy!” and “We’re doing it before the decision!” Then someone yelled, “20 seconds, 20 seconds!” And then, “Bam -- no change! No change!”

Ten minutes later, Andrew Burkly, managing director of Oppenheimer’s portfolio strategy, leaned back in his chair and watched as the volume level in the room returned to normal. “Everyone was sitting on their hands waiting, so now there’s a bit of disappointment,” he said. “I can’t remember a Fed meeting with so much anxiety.”

The traders at Raymond James had taken polls -- a slight majority expected a hike -- and complained about how tough it is to predict what Yellen’s Fed might do. “You don’t even know what to expect anymore, you have no idea if good economic news is bad news, if it’s good news or what,” one man muttered.

Under Yellen, the Fed has deliberated over raising rates for more than a year, waiting for employment figures and inflation data to signal the kind of economic growth that meets their expectations.

Now there’s more waiting in store. “People want to get back to stock-picking,” said Dan McMahon, director of institutional equity trading at Raymond James. “It’s just 25 basis points. They’re not going to do December. October? What is going to change by then?”

In the morning, traders had passed around Yellen’s horoscope, which Dave Lutz of JonesTrading Institutional Services pulled from a website. Born in August, she’s a Leo, and the celestial influences seemed to know what was up: “You’re the missing piece of the puzzle today, Leo. As a result, people will look to you for answers,” the horoscope reads. “Information and new ideas may be flying around, and you may be called upon to make sense of it all. Don’t be afraid to err on the side of the fanciful. This may be exactly the answer needed.”

(A date in the fourth paragraph was corrected in an earlier version of this story.)

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