- The Fed fund futures market continues to indicate the US Federal Open Market Committee will trim the rate by another 25 basis points Wednesday afternoon.
- Then comes the expected economic chaos, starting in the US and likely rippling across the rest of the glob over the coming years.
- The US dollar seems to be anticipating a return to higher inflation and higher rates, if allowed.
Something I should’ve mentioned in Monday’s Morning Commentary is it’s Fed Week. This means the final US Federal Open Market Committee (FOMC, the Fed) meeting of 2024 gets under way Tuesday morning and concludes Wednesday afternoon with an expected announcement of a 25-basis point cut. Beyond that, a look into 2025 is like trying to see anything through a thick London fog. As Watson (Sherlock Holmes’ assistant, not the algorithm trading world) described it, “…a dense yellow fog settled down upon London. From the Monday to the Thursday, I doubt whether it was ever possible from our windows in Baker Street to see the loom of opposite houses.”[i] Once the announcement is out of the way the arguing from financial media talking heads begins. I find I’m better served to turn off the noise and pay attention to what the markets continue to tell me, again made more interesting this time by the countdown to 2025.
