Brian Reynolds, Chief Market Strategist of M.S. Howells & Co., makes the following outcome based analysis:
We think there are four potential outcomes, based on a combination of Fed action and language. In order of what we think the initial stock price response will be today at 2:15 from the best to the worst, we think they are:
1) No tightening and language that says they are stopping;
2) No tightening and language that indicates wait and see;
3) 25bp tightening and language that says they are stopping;
4) 25bp tightening and language that says wait and see;
I think the most likely possibilities are #s 2 or 3; I usupect that many people are expecting #1.
The Fed funds futures have been all over the place: Last week, we were looking at a 40% chance of a hike; Yesterday, we were near 18%, and today, that has ticked up to 23%.
To quote Brian, "while this market is leaning heavily toward no tightening today, that is far from being fully priced in."
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.