Equities deepened their sell-off on Wednesday both in anticipation and because of the FOMC meeting minutes released Wednesday afternoon. The minutes confirmed what the market was expecting which is the committee is considering a series of 50 basis point interest rate increases as well as the onset of balance sheet reduction. The committee sees a $95 billion per month reduction which would shrink the balance sheet by about $1 trillion within the first 12 months. The news is a bit weaker than expected but, with the pace of inflation what it is, the pace is likely to accelerate over the next few meetings.

The S&P 500 fell more than 1.0% on the news but found support at the short-term moving average. If this level is able to hold the index is likely to make a move up to retest the all-time highs for resistance. If not, this market will most likely head down to retest support at the recent lows near 4,150.