CPI tomorrow...if to hot I say start raising rates.

Discussion in 'Trading' started by S2007S, Jun 12, 2008.

  1. S2007S


    If cpi data comes in strong the federal reserve should be stepping in to raise rates. I know the chances of this happening is 0%, but if tomorrows CPI data is out of control the federal reserve will have to take some quick action to cool it, at least raise rates 25 BP to 2.25%.
  2. Hard to see CPI out of control with all past unit labor cost data points being very tame and and a soft/deteriorating employment market. 66% of all costs for products and services produced in the US stem from labor costs, not from raw materials or crude oil prices.

    Fed will IMO hike once the employment market shows some strength and wages show stronger increases.
  3. Quick action by the FED?
    Who are you trying to kid?

    The "market" will adjust to higher rates ( and a stronger dollar ) well before the FED takes action on the tightening side.

    Why is it that you are unable to figure this out?

    The market LEADS.
    The FED follows.
  4. S2007S


    Quick, yes quick action, they took quick action a few months ago when they lowered rates 75 BP a few days before their regular scheduled meeting. Just a 1/4 raise would get people to notice that the federal reserve is interested in supported the dollar.
  5. If the #'s are better than expected, I'd expect a BIG up day as the market is quite oversold

    Personally I can't really justify how they could be a lot better than we think w/ energy affecting soooo many other industries

    IMO, going long at around 8:00est might be a decent idea w/ people continuing to cover their positions in the YM and ES, and setting a stop at b/e before the news.

    Then again, I had a horrible day today on an easy trend day, so don't take my advice. Do feel free to tell me how stupid i am though :)
  6. You obviously have very little understanding of how the FED and the markets work. By the time that the FED cut rates 75 bps back in January, the market had already moved interest rates dramatically lower.

    By the way, weren't you the person that has been arguing for month after month about how the FED should simply allow the markets to work by themselves, and not intervene???

  7. You don't recall? He kept saying the Fed's been reduced to "propping up the stock market" :p