FOMC minutes hawkish shock: S&P 500 drops 1.9%, Nasdaq 3.3%

The December 2021 FOMC minutes released January 5 2022 revealed the committee had discussed not only accelerating tapering but also balance sheet reduction occurring "relatively soon after" the first rate hike. The language on QT was more aggressive than markets had priced, and discussion of reducing reserves "quickly and meaningfully" hit duration-sensitive assets hardest.

The session became one of the first major events of the 2022 bear market. The Nasdaq 100 fell 3.30%, the worst single-session loss since February 2021 spill. Long-duration tech (ARKK -5.5%), megacap software, and unprofitable growth led declines. Treasury yields surged: the 10Y jumped to 1.71% from 1.63%. The 2Y-10Y curve steepened on rate-hike path acceleration and term premium rising.

January 5 established the tone for 2022's first quarter: rising real rates, compressing growth multiples, and rotating leadership from growth to value/commodities. The Nasdaq 100 would be down 13% by March 1 even before the Ukraine invasion. The session illustrated how meeting minutes can contain policy signals as important as the meeting itself, especially when QT framework details are discussed.