The Federal Reserve is poised to make a decision on interest rates this week, and the market is holding its breath. Will it be a 50-basis point hike or a 25-basis point hike? The answer to this question could have a significant impact on the economy, and investors are eager to know the outcome. The odds of a 50-basis point hike have been steadily rising in recent days, as a chorus of voices has called for the Fed to take more aggressive action to combat inflation. On Tuesday, the odds of a 50-basis point hike were estimated to be 80%, while the odds of a 25-basis point hike were only 20%.

For the Fed to countenance the veritable chorus of voices calling for 50 in recent days and then turn around and do 25 would go down as one of the most tone deaf decisions of the forward guidance era.

Not investment advice, but: Even odds on Tuesday for 50 versus 25 was the closest thing to free money you’re ever going to get in markets.

The market is already pricing in a 50-basis point hike, and a surprise move to 25 could send stocks soaring. Conversely, a 50-basis point hike could trigger a sell-off, as investors fear that the Fed is becoming too hawkish.

The decision is a delicate balancing act for the Fed, which is trying to cool inflation without triggering a recession. The central bank will need to carefully consider the economic data and the potential impact of its decision on both inflation and growth.

What the Experts Are Saying

Many experts believe that a 50-basis point hike is the most likely outcome. They argue that inflation is still too high, and that the Fed needs to take more aggressive action to bring it under control.

However, some experts are urging caution, arguing that the Fed should not move too quickly. They believe that a 25-basis point hike would be sufficient to slow the economy without triggering a recession.

The Impact on the Market

The Fed’s decision will have a significant impact on the market. A 50-basis point hike is likely to send stocks lower, as investors worry about the impact on economic growth.

However, a 25-basis point hike could boost stocks, as investors perceive it as a sign that the Fed is not as aggressive as previously thought.

The Bottom Line

The Fed’s decision on interest rates is a major event that will have a significant impact on the economy and the markets. Investors should carefully consider the potential implications of the decision and adjust their portfolios accordingly.

It remains to be seen what the Fed will do. However, one thing is clear: the decision will have a significant impact on the economy and the markets. Investors should be prepared for volatility, regardless of the outcome.

The Waiting Game

The wait for the Fed’s decision is a nerve-wracking one. Some investors are feeling the pressure, and the anticipation is palpable.

Waiting for this decision, I feel like a parent waiting to find out if my unborn child is a boy or a girl: should I buy a football and paint the nursery blue, or will it be a stuffed unicorn and a coat of pink? Either way, I should probably start a college fund.

The market is a complex beast, and there are many factors that will influence the outcome of the Fed’s decision. But one thing is for sure: the market is about to explode.

The Next Big Move

It’s impossible to predict what the market will do after the Fed’s decision. However, it’s a good bet that there will be some significant volatility.

If the market rallies strongly after 50, what are the chances of a strong pullback starting soon after options expiry this Friday?

I have to admit my hunch waxes and wanes with the whim. Today seems more possibility for 25? So many moving parts dynamically interwoven, so little time?

No. It’s 50. Anything can happen, but by Tuesday afternoon the odds were 80% 50 20% 25, and that’s being generous to 25.

Folks, if you don’t understand why that’s the case, then you shouldn’t be trading this.

Obviously, I could be wrong, but I’m not wrong to say that as of Tuesday, the odds were nowhere near even.

In my mind it’s definitely 50, the whisper is on the wall.

Yeah good stuff. Like usual your consummate elucidation comes to the fore. A lot of “pro” money inextricably interwoven (old enough, axiom Howard Cosell bandied about). Insinuation leaning structure effectively will determine?

Dudley’s 2020 comments stated the past and current truth out loud. Great wrap.