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Strategies & Market Trends : Experienced Investors

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From: Saulamanca9/12/2005 4:04:50 PM
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Things that Make You Go "Hmmm"
9/12/2005 3:08 PM EDT

Despite all the commentary about how the Fed would pause in Katrina's wake, fed fund futures odds are back to 84% for a 25 basis point hike next week, according to Miller Tabak.

Fed fund futures are pricing in 100% chance of a hike by the Nov. 1 meeting and 46% chance there will be a second, according to the firm. There's an 88% chance that there will be two hikes in the FOMC's three remaining meetings in 2005.

Two weeks ago, the odds fell near 0% that there would be more than one hike.

While some of us aren't surprised, the question is when the stock market awakens to this development -- assuming the post-Katrina rally really was based on the possibility of a less aggressive Fed.

--Aaron Task
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