25bp CUT Equity markets rally sharply. The US Dollar collapses down through 2004 lows. The Yen stages a massive rally, taking some steam off the SP, which nonetheless, eclipses all-time highs by a few points. Bond have a knee jerk reaction: rallying prices and falling yields are quickly reversed into sharply falling prices and rising yields. This baffles everyone, and as bonds gain steam to the downside, (rates rise sharply), the US stock market begins to lose froth and finally begins to fall. Imagine the talking heads pumping stocks, making new highs, rates are down, real estate is going to be fine, money is cheap, and so are stocks...Joe Shmo gets in at the top - AGAIN... 25bp RISE Bond markets collapse, equity markets collapse, housing shits all over itself. But this is good news, right? We are raising because the economy is good! We just need to take some coal out of the engine - it's getting too hot. The US Dollar is the benefactor, rising significantly, specifically since the Fed's bias has now changed from "tight-light" to 'Tight". As the Buck rallies, energy prices fall hard, adding further pressure to the major stock indicies. So many scenarios are possible...it's the true genius who can put the pieces of the puzzle together while they are still strewn all over the table.