The Fed held rates steady, and that is arguably the smarter move because the bond market has already tightened conditions on its own.

• The Fed left rates unchanged, and Trump did pressure new chair Kevin Walsh not to hike.
• But the real reason to hold is that bond yields have already jumped, doing the work of about two rate hikes.
• Those higher yields come from the Iran conflict pushing up oil prices and inflation fears.
• Walsh's style is to let the market sort itself out rather than react with constant Fed moves.

Outlook: Expect the Fed to stay hands-off as long as the bond market keeps tightening on its own.