Post-Fed Calm, Rotation Intact

What Happened

• Markets absorbed the Fed with minimal stress; equities held gains and volatility bled lower through the close.
• The dollar drifted down as hedges were unwound; funding markets stayed orderly.
• Energy and defense extended their outperformance, with ETF flows showing continued rotation out of mega-cap tech.

What It Means

• The absence of a post-Fed spike in volatility confirms that positioning—not fear—is steering December.
• A softer dollar is loosening global funding conditions just enough to keep commodities and EM supported.
• Persistent flows into energy/defense show that investors are still buying balance-sheet certainty over duration.

What I Think

• Calm is the signal: without stress, flows get to keep migrating away from crowded trades.
• I expect the dollar to stay heavy unless data surprises hot; that keeps the rotation base case intact.
• I’m keeping exposure skewed toward real assets and quality industrials while tech consolidates.

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Market Terms

• Hedge Unwind — Removing protective trades after an event passes without shock.
• Balance-Sheet Certainty — Preference for companies with low leverage and predictable cash flows.
• Duration Risk — Sensitivity of valuations to changes in interest rates.