Equity markets pulled back on Thursday following the Fed's Wednesday policy statement. The statement sent the yield on the 10-year treasury shooting skyward to set a new multi-year high, and the threat of recession grows. At the new levels, the rate on the 30-year mortgage will also rise and soon top 8%. At this level, homeowners signing contracts for new mortgages will be paying nearly 3 times as much interest payments as at the bottom of the pandemic, which threatens the housing market. With rates at these levels, existing homeowners are unlikely to move without cause, keeping the market tight.

The S&P 500 shed more than 1.50% at the session's low and is in danger of a more profound decline. The index is above critical support at the 150-day moving average, which may not hold. In that scenario, the S&P 500 could fall another 5% or more before hitting bottom. The next significant catalyst is the PCE report due next week. Another hot read on inflation will ensure the FOMC hikes rates at the next meeting.