Playing contrarian for this weeks FED, it would appear that a rate cut has already been priced in to the broad markets. A 25 bp cut will prob not get you much more dollar downside as everone and their dog is short the dollar. What could be more suprising is if the FED actually held rates steady with the yada yada of vigilance and more yada yada. Only reason I am having doubts is that with global indices at or near record highs, and dollar at or near record lows with energy at all time highs, it makes a hard justification for the FED to loosen any more. So rate cut of 25 and dollar likely goes nowhere, leading to some short-covering to take some profits. No cut and dollar has a very swift rally. The one outlier is a 50 bp but, which seems more destabilizing than helpful thus leading me to believe that it won't go this time.
.25 is PRICED IN .50 is not no rate cut and markets fall... .50 bp is NOT the way to go this time around, many talking heads are desperate for another .50 bp...if they cut .50bp I will be extremely surprised....I was surprised to see a .50 bp cut in Sept.
Even if the Fed cuts just 0.25% the market WILL rally. Even if 25 if "already priced in". Valuation is still reasonable, and will be seen as a support to the economy/markets. Don't fight the Fed.
.25 is priced in......you have got to be kidding me if you dont think .25 is priced in.... "dont fight the fed" how many times does the media need to say this.... seems to me they are not trying to fight inflation, but rather fight the loss of liquidity driving the market...
The falling greenback has reinflated the economy significantly. Therefore the reason to let it keep slipping is gone. As a side note, Classic intermkt analysis puts stocks and commodities frothing over in sync at the tail end of an expansion in the business cycle. So, I agree with the OP. I also happen to believe a 50bp cut will send the message that we are indeed at the tail of an expansion....
thats a pretty lousy place to tie up funds if you want to go long the dollar - not even optionable, and probably has high mgmt fees. just sell some AUD, CAD, and EUR in forex.
As everyone knows 1998 was a close parallel to the present. Weirdly the Fed rate cut on 10/15/98 marked a LOW in the dollar. Stocks of course motored higher.