Is the Fed going to raise rates tomorrow? According to the Atlanta Fed's prediction tool, the answer is maybe:
Before the collapse of Silicon Valley Bank, the probability of a rate hike was 97%, a virtual certainty. After the collapse, that probability dropped to 40% and currently stands at 55%.
Place your bets.
POSTSCRIPT: Needless to say, I don't think the Fed should raise rates. But then, I didn't think they should keep raising rates even before the collapse of SVB.
this is a great post and your opinion is excellent, not like the crappy post on cities, LOL.
I think they'll go ahead with the quarter-percent hike, and come out with some statement that says they're keeping a watchful eye on inflation, but they think they have moved the rates enough and have no current intentions to change them further for the next few months.
They are worried about harmful interpretations that might gain traction if they decide against the previously hinted 0.25% increase. They want to stop people thinking the sky is falling.
Interesting. Bloomberg says futures impute (predict?) a .25% increase at 80/20.
“…As of Tuesday afternoon, markets were pricing in about 80% odds that the Fed will raise rates by a quarter point, to a range of 4.75% to 5%, the highest since 2007 on the eve of the global financial crisis…”
My dumb guess is yes, they will raise .25% tomorrow, and make a pretty big show about how they’re watching carefully the health of the banking sector, lending facilities, and slowing the unwinding of their big fat balance sheet (slow the selling of MBS)…
And the stock market will react in a way that makes little sense to me, seems paradoxical, then will eventually go the direction I expect, but by then I will have lost money in both directions.
I think that's definitely a good read on the stock market.
The odds are about 90% of a rate hike.
https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html
I agree NeilWilson - I would be very surprised if the Fed does not increase rates.
Jerome Powell is desperate to help out Trump by putting the economy into recession so I would rate the probability very high.
I find the idea of raising rates again instead of pausing baffling.