The rate probability curve for December 11, 2019 now slightly favors rate cuts over hikes according to CME Fedwatch Odds.
There is a 13.4% chance of at least one cut vs. a 4.6% chance of at least one hike as of this snapshot taken today
Mike “Mish” Shedlock
You are Dreaming… Wages are Rising and will be at close to 4% year over year soon with the unemployment rate likely to be closer to 3% than 4% by Dec 2019.. By the way retail sales are white hot. Weekly chain store sales are running over 9% year over year as of last week.. Core CPI will likely catch up or run higher than headline CPI since the cost of EVERYTHING EXCEPT gas has been jumping in price. Even clothing & electronics are much more expensive with very few if any discounts or promotions. And car sales are still at record highs at the retail level. Many popular models are selling at FULL MSRP + Dealer of 10% or more…
Wait until wall street prices this in, equities are going up, up, and away, possible soft landing, but anything resembling a recession will turn into a speed bump as long as banks don’t pull back like they did in 2008.
Who says the Markets are not fixed? They are a true auction style market…albeit with a few algorithms to go along with it? As long as the entire Central Bank System are in cahoots together this will never end…not kicking the can down the road…kicking the solution out altogether…Sooner or later you have to pay the piper and when that day comes it won’t be pretty…you can only refinance your debt for so long before you run out of powder…
Why would they cut rates – has the pension crisis been fixed? There’s more than enough money flowing in from troubled foreign countries to keep stocks buoyed. That doesn’t mean stocks will not pull back some more in Q1 to get more bag holders into bonds.
Another year (same as it ever was) of massive money printing and central banks buying up everything within sight or hearing,bonds,stocks ,commodities ..literally everything….what’s been happening for more than a decade? yes another fresh money printing record will be set in 2019!
The market discounted the rate hikes in 2018 as well. They think that the FED will not sacrifice the stock market. I am taking the opposite if that bet. Perhaps the FED is dead set on increasing rates.