There will be no Fed rate cut

[trickshot]

Quote from MTE:

See, with that I disagree, I think the odds are a lot better than in lottery!

But are the expected returns higher?

 

[kashirin]

Quote from basis:

Sep still trades. And it's saying roughly 40% chance of 50 bps. October is slightly higher than that, because of the chance of an intermeeting cut.

basis how do you count?
sep trades now at 94.995
0% 50 bp
98% 25 bp
2% 0 bp

 

[dhpar]

the price is a future price based on all days in september - it is not based on the ff target at the end of Sep. learn the contract specs.

 

[S2007S]

There should be no rate cut but of course we all know there will be a 25 BP cut. If there is no rate cut today DOW 13250 will surely be here by 4pm today.


The crying bulls are hoping for something. Only catalyst left for them is a rate cut.

 

[Ivanovich]

I still think it's completely insane to cut with oil and gold prices at new records, with the market skirting it's highs.

Total madness.

 

[basis]

Quote from kashirin:

basis how do you count?

Sep settles into the AVERAGE EFFECTIVE OVERNIGHT rate. The target has nothing to do with actual settlement. So far in September we have 17/30 days with an average rate of 5.06. The implied average rate for the month from the futures price is 5.01 (assuming 94.99 last).

5.01 = (rest of month rate * (13/30)) + (5.06 * (17/30))

rest of month rate = 4.945

Assuming no tracking error, and that only a 25bps or a 50 bps cut are possible, that's basically a 20% chance of 50 bps, and an 80% chance of 25 bps.

October is a better month to look at... but then you have to start assigning probabilities to an intermeeting cut....

 

[trickshot]

And the crooked wall street bankers have been bailed out again.

 

[rotflmao1]

Quote from Bob Rowshan:

I'm surprised by the naivete of this board in believing the Fed will cut rates next week. Maybe this board is a good contrary indicator because there will be no fed rate cut in September!

Do u feel like a douchebag now?? You should. Never say never.

 

[Babak]

Not difficult to see this coming. There was a 100% chance of a 25 bp cut and a 75% chance of a 50 bp cut (FF futures market).

As I said before, the bond market was the "tell" and it was screaming for a 50 bp cut.

Check out the long term chart of the Fed rate and the 90 T-bill rate to see how the fixed income market leads the Fed by the nose.

 

[Bob Rowshan]

Quote from Babak:

Not difficult to see this coming. There was a 100% chance of a 25 bp cut and a 75% chance of a 50 bp cut (FF futures market).

As I said before, the bond market was the "tell" and it was screaming for a 50 bp cut.

Check out the long term chart of the Fed rate and the 90 T-bill rate to see how the fixed income market leads the Fed by the nose.

More after-the-fact analysis from the resident ET buffoon.