With Janet Yellen choking back the vomit as she shifted The Fed’s stance to a “hawkish hold,” markets remain just as confused (and disconnected) as they were after The FOMC’s “dovish hold.” The problem, as Deutsche explains, is The Fed’s reliance on ‘conventional’ inflation dynamics (and its mean-reversion – higher in this case) as opposed to actual market expectations (which are collapsing), leaving them open to a major Type II policy error – the risk of rejecting something that is, in actuality, true.