Everybody expects the FED to lower rates by 25 bp this week.
But ... :
- The markets are near all time high
- China US are talking
- Brexit is almost surely pushed
Ok some indicators are softening but with uncertainty lower (still very present but lower) what if they would decide to pause instead? That would be highly unexpected and that would create a nice reaction to the down side in the markets. If the FED lowers rates by 25bp, the reaction will be minimal because it is already priced in with 97% certainty. It is the surprise effect of leaving the rates unchanged that could be interesting this week!
I am not saying it will happen, but what if...?
This is not a trading advice. Just an idea...
But ... :
- The markets are near all time high
- China US are talking
- Brexit is almost surely pushed
Ok some indicators are softening but with uncertainty lower (still very present but lower) what if they would decide to pause instead? That would be highly unexpected and that would create a nice reaction to the down side in the markets. If the FED lowers rates by 25bp, the reaction will be minimal because it is already priced in with 97% certainty. It is the surprise effect of leaving the rates unchanged that could be interesting this week!
I am not saying it will happen, but what if...?
This is not a trading advice. Just an idea...