Here's What Traders Were Doing Minutes Before the Rate Hike

  • `Anticlimactic' rate hike draws quips from jokesters
  • Sure it's an historic event, but more pressing need is lunch

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Seconds before liftoff -- perhaps the most talked-about, chewed-over, let’s-get-this-over-with decision in Federal Reserve history -- the jokes were flying at Drexel Hamilton, a broker-dealer in lower Manhattan. 
“Any more bets anyone wants to place?” one trader asked.  

“I want 50!” another cried, referring to a 50 basis point increase -- which no one, here or anywhere else, was expecting.
Up and down Wall Street, Wednesday’s Fed decision, so carefully choreographed for months, yielded either yucks or yawns. 
At Drexel Hamilton, one trader unwrapped a sandwich just as the expected news hit at 2 p.m. -- a 25 basis-point increase that brought to a close an epic period of near-zero interest rates and, with it, an interminable wait on Wall Street. He looked up. Then he took another bite.

“Now is when the work starts,” said Harry Smith, the firm’s vice president of agency trading. “You had a lot of customers who wanted to see the prints and now need to make a decision.”

Market Reaction

The market’s reaction was as predictable as the Fed. Stocks rose, bonds fell.

The Fed made it easy by telegraphing its actions and moving slowly, said Steve Ivcic, Drexel Hamilton’s managing director of agency trading.

“When I started, we went from 5 percent to 20 percent,” Ivcic said. “It was a different environment where we had to guess and interpret what the Fed would do. This was an afterthought for them.”

Over on the fixed-income desk, Glenn Harvey said he left the Marine Corps in August after seven years and joined Drexel Hamilton.

“I’m the new guy,” he said. “It’s been an interesting day and I’m glad to have been a part of it, but it’s been nothing too intense.”


At the New York Stock Exchange, the neo-classical bastion of American capitalism, blue-smocked traders gathered around TVs to watch Fed Chair Janet Yellen explain the move.

A trader turned up the sound.

“Turn it down!” someone yelled.


“Maybe Janet Yellen is in the bathroom,” a trader quipped.

The hike was “almost anticlimactic,” said Peter Costa of Empire Executions and a NYSE governor.

Costa wasn’t even at his booth, where he executes trades. He was letting the market settle down before getting back in, he said.

Peter Tuchman of Quattro Securities, a fixture on the exchange floor for 30 years, agreed.

“It’s crazy,” he said. “There’s nine years of anticipation.”

Stephen Guilfoyle of Deep Value Execution Services savored the Fed’s grand moment.

“There’s always been more hype than warranted,” he said. 

There isn’t as much action on the trading floor as there used to be. Most U.S. trading has migrated to other exchanges. And most NYSE trades are executed at a server farm in Mahwah, New Jersey, about 35 miles from lower Manhattan.

Still, Guilfoyle said, it’s “exciting to be here because this really is the epicenter of all things capitalism.”

Before it's here, it's on the Bloomberg Terminal.