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Zero Hedge
ZeroHedge
18 Sep 2024


NextImg:The Fed: 0 To 100 In 3 Meetings?

Authored by Peter Tchir via Academy Securities,

There is no doubt the Fed is driving markets right now.

The only question remains, is are they driving an EV (fast acceleration) or a traditional ICE vehicle (slower off the line but builds up speed nicely).

Before exploring our take on the various scenarios (which we covered a bit in this weekend’s Great Debates T-Report) it is a good time to remind everyone in the New York area that Academy’s Geopolitical Roundtable (with a Macro and Credit focus) is fast approaching.  Please register here for the event on Thursday October 10th from 5:30 to 7:30 pm at Bobby Vans (230 Park Ave location) for drinks and heavy Hors D’oeuvres. With General (ret.) Spider Marks leading the engagement on the Geopolitical side. I will chime in on some macro and credit, along with our debt capital markets, syndicate and corporate bond sales and trading teams! Should be informative and a good way to catch up on the progress Academy has made in the space over the past year. Please do register because while the space is comfortable it is limited and the initial response has been strong.

40% probability of 25 bps.

If the Fed stuck to their messaging and was truly data dependent they would only go 25 bps, but they seem to be indicating and getting pushed by the market to go 50).

60% probability of 50 bps.

The markets are steering them in this direction. I thought they should go 25 in July, so I support 50, but it doesn’t seem in line with much of their official messaging. Ultimately 50 would tell us to listen to a certain reporter at the WSJ (and if they don’t go 50, his reports will become less of a fixation).

With a lot already priced in, I think stocks and bonds have more downside risk than upside, though, the risk of a big move, seems to be skewed more heavily to the upside, based on the probabilities above.

As always, we will send our interpretation of “what the heck just happened” after the press conference, and suspect that we will have several big moves and reverses today, as the market seems more divided on possible outcomes than we’ve seen in some time (and the tools at the Fed’s disposal, spread over the entire hour or so, from the time of the announcement, the dots, until the end of the presser!

Good luck, I re-iterate my wish that they Fed did this at 10 am EST, so we had less time to second guess ourselves, and I highly encourage those in the New York area to check out (and register) for the Geopolitical (with Credit and Macro) roundtable on the 10th!