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Started By
Message
FED decision today and implications
Posted on 11/2/22 at 9:39 am
Posted on 11/2/22 at 9:39 am
There is a 99% chance of a .75 hike today. Anything else will get instant insanity across all financial markets.
The trillion dollar question is: Will they announce a slowdown in rate hike pace?
said:
And I agree with that.
Here's the problem:
A Wall Street Journal article on 10/21 hinted at a slowdown in pace and people say it was put out at the behest of the Fed. On top of that, multiple Fed speakers have voiced concerns over the pace of tightening and things starting to break. These things point to the Fed telegraphing a slowdown today.
On the other hand, early estimates say the next CPI will show inflation not only NOT slowing down, but increasing(we all know prices are going up, but how fast prices are going up is getting even worse according to early estimates). The job openings # also shot way back up this month. Throw in a DOW that recently made a run at 33,000, and a dollar that weakened significantly since the WSJ article, and the Fed has no data point justifying a slowdown.
Do they want to say something that sends the dollar down, the DOW to 34000, and loosens financial conditions at a time inflation is getting worse? THEY DONT WANT THAT AT ALL.
So how can they slow down the pace of hikes without loosening financial conditions at an unacceptable time?
They either don't agree to slow down yet or, if they do, add something about the terminal rate going higher than previously expected through continued .25 hikes well into next year.
All that said, I'm short the dollar but very heavily hedged for a possible hawkish fed/stronger dollar.
The trillion dollar question is: Will they announce a slowdown in rate hike pace?
quote:
I Love Bama
said:
quote:
If the FED even hints at a pivot today, the dollar is 100% done.
They MUST stay on course and we must deal with the pain associated with that.
And I agree with that.
Here's the problem:
A Wall Street Journal article on 10/21 hinted at a slowdown in pace and people say it was put out at the behest of the Fed. On top of that, multiple Fed speakers have voiced concerns over the pace of tightening and things starting to break. These things point to the Fed telegraphing a slowdown today.
On the other hand, early estimates say the next CPI will show inflation not only NOT slowing down, but increasing(we all know prices are going up, but how fast prices are going up is getting even worse according to early estimates). The job openings # also shot way back up this month. Throw in a DOW that recently made a run at 33,000, and a dollar that weakened significantly since the WSJ article, and the Fed has no data point justifying a slowdown.
Do they want to say something that sends the dollar down, the DOW to 34000, and loosens financial conditions at a time inflation is getting worse? THEY DONT WANT THAT AT ALL.
So how can they slow down the pace of hikes without loosening financial conditions at an unacceptable time?
They either don't agree to slow down yet or, if they do, add something about the terminal rate going higher than previously expected through continued .25 hikes well into next year.
All that said, I'm short the dollar but very heavily hedged for a possible hawkish fed/stronger dollar.
4
Posted on 11/2/22 at 9:54 am to BarleyPop
quote:
All that said, I'm short the dollar but very heavily hedged for a possible hawkish fed/stronger dollar.
Posted on 11/2/22 at 9:57 am to wutangfinancial
So true. Its going to get bloody today.
Posted on 11/2/22 at 10:12 am to BarleyPop
The Fed is fighting credit markets and equity investors are fighting the Fed. It's quite entertaining TBH. I wouldn't want to be short the dollar unless monetary AND fiscal stimulus were imminent.
Posted on 11/2/22 at 10:33 am to wutangfinancial
I'm short the dollar because it is through the roof and will come down at some point. When that will be keeps getting kicked down the road. In the meantime, I can make some aggressive plays at a stronger dollar because I'm covered if it weakens.
My open positions will be dramatically different a few hours from now after Powell speaks.
My open positions will be dramatically different a few hours from now after Powell speaks.
Posted on 11/2/22 at 1:32 pm to BarleyPop
OOOOF for all the guys playing for a pivot
first sentence tells you all you need to know. Mentions inflation, strong commitment, and mentions 2% target AGAIN.
At some point they gotta stop mentioning 2%; just no reason to now.
first sentence tells you all you need to know. Mentions inflation, strong commitment, and mentions 2% target AGAIN.
At some point they gotta stop mentioning 2%; just no reason to now.
This post was edited on 11/2/22 at 1:33 pm
Posted on 11/2/22 at 1:46 pm to BarleyPop
Fed got caught insider trading a year ago. All the corrupt criminals then got out the market. Now, their goal is to crash the entire financial system in return.
This administration is nothing but complete intentional destruction of America and the middle class.
This administration is nothing but complete intentional destruction of America and the middle class.
Posted on 11/2/22 at 2:20 pm to BarleyPop
Outcome:
They want to slow down. Probably .50 in December which will be wild if inflation and employment stay very strong.
quote:
if they do, add something about the terminal rate going higher than previously expected through continued .25 hikes well into next year.
They want to slow down. Probably .50 in December which will be wild if inflation and employment stay very strong.
Posted on 11/2/22 at 8:14 pm to Pendulum
I do not understand why people are listening to narratives from talking heads rather than simply listening to EXACTLY what Powell says / puts in minutes
They have basically telegraphed everything without so much as a wiggle. They’ll keep doing that because they are under the impression they can still navigate a soft landing- and their words and speeches is a big arse part of that
They have basically telegraphed everything without so much as a wiggle. They’ll keep doing that because they are under the impression they can still navigate a soft landing- and their words and speeches is a big arse part of that
Posted on 11/3/22 at 5:59 am to BarleyPop
quote:
I'm short the dollar because it is through the roof and will come down at some point. When that will be keeps getting kicked down the road. In the meantime, I can make some aggressive plays at a stronger dollar because I'm covered if it weakens. My open positions will be dramatically different a few hours from now after Powell speaks.
The dollar remains strong because the USA is still the best country in the world to invest. Better than Mexico, Canada or anywhere in South America. Better than Africa. Better than Europe…
Posted on 11/3/22 at 6:41 am to Shankopotomus
quote:
I do not understand why people are listening to narratives from talking heads rather than simply listening to EXACTLY what Powell says / puts in minutes
They have basically telegraphed everything without so much as a wiggle. They’ll keep doing that because they are under the impression they can still navigate a soft landing- and their words and speeches is a big arse part of that
Agreed. And it’s all nonsense.
Interest rates can rise to 10% or 12% and it won't make one damn bit of difference .... it won't stop inflation.
Economics 101 ..... demand is not creating inflation here. Current inflation is a supply side issue, driven by a radical change in energy policy. And until those policies change, inflation will continue unabated and uncontrolled.
Posted on 11/3/22 at 8:57 am to cadillacattack
So...monetary policy won't produce any oil refineries?
Posted on 11/3/22 at 9:09 am to wutangfinancial
FED will follow Bank of England. Bank of England already raised by .75. UK is in worst state but they did what they had to do.
Posted on 11/3/22 at 9:17 am to SaintsTiger
quote:
The dollar remains strong because the USA is still the best country in the world to invest. Better than Mexico, Canada or anywhere in South America. Better than Africa. Better than Europe…
You'd short the dollar right now for the same reason you'd buy the DOW if it dropped to 22000.
I dont need a weak dollar for my shorts to profit. All it takes is a pullback from these extraordinary levels. A weakening dollar will still be strong compared to everything else.
Posted on 11/3/22 at 9:19 am to cadillacattack
quote:
Current inflation is a supply side issue, driven by a radical change in energy policy
So you would disagree that inflation was sparked by the massive M2 uptick from COVID lockdown response by the administrations?
The energy policies directly affect owner rents and wages which are a large component of CPI? Genuinely asking.
Posted on 11/3/22 at 9:52 am to LSUcam7
Posted on 11/4/22 at 7:19 am to BarleyPop
quote:
All that said, I'm short the dollar but very heavily hedged for a possible hawkish fed/stronger dollar.
quote:
You'd short the dollar right now for the same reason you'd buy the DOW if it dropped to 22000.
quote:
All it takes is a pullback from these extraordinary levels.
And just like that boys and girls, I made a killing off hedges in the post press conference runup, and again off my shorts when it dropped overnight. On to NFP this morning. $$$
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