MY FED PREDICTION
Since everybody else on earth has a prediction on the fed and the markets here is mine.
The fed cuts by 25 basis points....
The fed language says the door is wide open for further cuts.
The fed cuts the discount rate another 50 basis and possibly 75 to help the credit markets.
The market probably doesn't do much on Tuesday going back and forth after the news...and then rallies on Wednesday.
Feel free to comment on your predictions.
joseph cioffi's Source Page - Associated Content
1 comment:
Joe,
I agree with your prediction except that I doubt that there will be much--if any--of a rally afterward. IF there is, it will be short-lived.
A .25 cut is already more than priced into the market. It will take a .5 cut to get a good reaction rally going.
My own prediction is that the second half of September will be very volatile. People will be worrying about 3Q earnings. Also, there could be significant hedge fund selling as they sell stock to meet redemption requests.
The biggest risk to my prediction is that the brokers 3Q reports--due this upcoming week--are better than expected. If they are, then we could indeed rally with "only" a .25 cut.
Bruce (who recognizes that his guess is just that--a guess)
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