Stocks were on a tear higher today ahead of the FOMC announcement on interest rates tomorrow afternoon.
The economic news is coming in weakly, and I suspect that the market is guessing that the Fed will defer on their first interest rate increase of 25 basis points for a few more months.
There is probably going to be a split on the the FOMC between the hawks and those who view the Fed’s mandate a bit more broadly with an eye on the real economy. I fancy Stanley Fischer to be the leading hawk, although others will speak more loudly on it, and Janet Yellen to be the leader of the doves. Janet I suspect is also going to serve as a scapegoat and patsy if things go badly, but that is a thought for another day.
There are quite a few who identify with the ruling class because they think it also will bring them riches and privilege. A lot of these fellows have sold themselves because they have bought the line that the moneyed are trying to uphold freedom and liberty, whereas all they are doing is finding new rationales for their greed, cheating, and looting. Little do their supporters realize that they, in the end, are just somewhat useful fools, in a very long chain of fools.
Personally I don’t think a 25 basis point is going to make a big difference to the real economy given all the policy errors and damage that the Fed and their Bankers have already accomplished, with heaping helpings of bad decisions from the political class.
The chart formations are inconclusive, so we’ll all be watching what happens tomorrow afternoon quite carefully, but especially the world’s reaction and what happens in the trade going into the weekend.
Have a pleasant evening.
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