Markets at the moment are pricing an above 50% likelihood (properly above) for a 50bp FOMC price reduce on Wednesday.
Take into account:
1. Is the FOMC going to suppose that if they do not reduce by 50bp it’s going to set off enormous monetary market volatility?
2. Or is the FOMC behind all of it, drip feeding information to bond insiders to supply cowl for a 50bp reduce?
The upper I see this 50bp pricing rise the extra I’m leaning in direction of 2. I’ve been persistently at 25, however am getting rattled. How a lot can a koala bear?
