. . . . .On Interest Rates. . .
With CPI increasing as it has, another 50 basis point cut would be extreme, IMO. However, I felt that 50 basis points were too extreme last month. What we don't need is to over-correct again. So if the FED is really trying to cool things down and keep us in a dis-inflationary period, they will ease up on the cuts somewhat this time around.
I give it a 55% chance of a 25 basis point cut [or mixed 1/4 point and no change]. . . 30% chance of NO RATE CUTS and just a 15% chance of a 50 basis point cut.
Now how the media spins all this is anyone's guess. This decision SHOULD not move the markets decidedly one way or another. But all it takes is the hyping of a particular spin and the markets can be moved sharply, since they are in a stage of flux each time the FED makes an announcement.
As far as today goes, it would not surprise me to see some dramatic moves lower ahead of the announcement. . . despite a relatively flat futures market.
But as far down as we are, I do not fear any re-test of the April 4 lows. . .and am happy to ride it out. So regarding my personal view moving forward, I lean toward the bargain hunter. . . [though quick to take profits on swings until the retest is complete]. . . then once the retest is complete, I turn considerably longer-term bullish.
If the retest is not completed this time around, then I believe we get stuck in a tight trading range from July 16 through September 3rd, where I would be near-term bearish as we would begin to resume our retest of the April 4 low. If this is the case, I would not turn bullish until some time during the first half of October. But at that point, would be FULLY long-term bullish. . .for the first time in quite a while.
Rande Is |
