“The Fed is likely…”

As FOMC meets to discuss what everybody knows…

The economic eggheads of the oval table

The Fed is likely to signal a March interest rate hike and that further policy tightening is coming

“The Fed is likely…”

Everybody knows it, because the market knows it. And the market knows it because the wise guys at CME know it. So the media broadcast it back to us in a feedback loop.

Below is a little bit of non-critical information from NFTRH 690 in the form of some opinion making, along with CME’s expectations.

The question now is what the machines and algos plan to do with it when it is released. Yesterday took the markets to its limits. From there we either confirm a bear or recover. But the Fed – assuming it does not unexpectedly roll over into dove mode (don’t get caught hoping for that, it’s really unlikely) has already been factored.

Leading up to then and in the aftermath, it’s more up gamesmanship of the algos, machines and momo traders. Who’s buying or selling what news? Stuff like that.

FOMC on Deck

CME traders, whose job it is to speculate on the odds of FOMC rate hikes, see no policy change this week but they do see – and thus the tanking stock market sees and has been discounting – a near certain hike in March. This per the Fed’s well telegraphed intentions.

But our view is and has been that with respect to a Federal Reserve so cynical about the inflation it creates as a matter of ongoing policy, it will need to be invited back into the macro house. A blood sucking vampire needs to be welcome, even begged.

So the hard stock market correction thus far may not have ultimately dropped far enough yet to back the inflation-stoked mobs with pitchforks and torches away from the vampire’s castle, let alone get them ready to beg for more inflation. You see? The real pain has not even begun (in my opinion). It’s a process. It could take time.

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