For Tomorrow --- Pause or No Pause?

Quote from MacroEvent:

all i know, is that all the fed verbiage in their rate announcement tomorrow would never be enough to satisfy everyone as to why they paused if they did --- it would make some wonder why they REALLY paused.
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Nicely understated comment. I agree. The transparency the Fed has tried hard to maintain would be VERY undermined by a pause. The uncertainty would be far worse than another measly 25bp that the market already expects.

Also: If equities had broken on oil or Katrina I could argue no hike. However with stocks on 4 year highs and housing becoming a "soft landing" (look at IYR) there's absolutely no impetus for a surprise to-morrow. In fact as long as stocks rise in the face of restrictive policy, they'll keep tightening. Gives 'em more bullets to ease with down the road when the inevitable declines/crashes do occur.
 
if they raise... market drops 5 to 10 points max... the rockets higher because "hmm things must be ok to keep raising... let me buy here"

if they pause... market rockets up 10 to 30 points and then... drop hard taking out recent lows... hmm Katrina must really be bad and the ripple effects will start.

Either way it is tough to be a 'long-term' investor at this point as we are hovering in the "top of this bull market zone... or "break out of this range" zone...

really strange because each time zone chart you look at tells you a different story... daily... weekly... monthly etc.
 
It'll be another 25 bps.

If they would pause, the recent speeches from Fed governors (Moskow, Yellen, and Santomero) would've indicated that the Committee would pause. Yet, they haven't.

Hurricane Katrina was, indeed, devastating, but the recent Fed members' speeches considered the catastrophe as not having permanent damage, so the event wasn't considered as a strong excuse to take a pause on September 20th.

Actually, as long as the phrases "accommodative" and "measured pace" remain in post-meeting statement, the rates will continue to go up, perhaps up to 4.25% by the end of the year.

Good luck!
 
First move after Fed announcement is likely to be down. Why? When there is a 50-50 split on a Fed move, the first move is down because the disappointed contingent, in this case, either the pause or raise camps, panics and blows out their positions.
 
The world is drunk with cash and new wealth. It will loan (park) money to the U.S. if the interest rate is 0%. The Feds can raise, pause, or lower the short term rates. The long term doesn't give a rat's ass.

Most people expect a raise or a pause, so the equities will rally after either decision is made.
 
actually in my opinion the "inflation" speak or lack there of will be the primer for the main price action move tomorrow in the markets.
 
Has anyone taken into account the cost to the Feds of rebuilding New Orleans? Don't they have to pay interest on their deficit? ANd now supposedly another is headed into the same direction...right up GW's ass...:cool: :D

Sayng that...I'm sitting in cash in Canada tonight...I think we're in for a little downturn...
 
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