pds, Fed wants to control the inflation, not create a deflation, the economic slow down risks are now elevated, the credit creation will be slower than the other countries for the next 2 quarters, the USD should bounce as soon as Fed says the risks of inflation is not a concern anymore. They do not have to lower at the moment, but rather they just need to say they won't be raising for the intermediate term...
Yes, the Fed will have very soothing words on Tuesday. However where are the signs
of an impending deflation? SPX is on track to record 9.5% gain in earnings. That is 80%
of the stock market. China, India, Brazil & Russian economies are in the middle of a huge boom.
That will make it very difficult to get deflation take hold anywhere. Money supply is growing
at double digit rates in every major industrial country except Japan & Switzerland. The real
reason we had a surge in food & fuel prices is the surging demand from China & India & others.
And we will get more hikes as the people there become more prosperous.
I am sure Fed knows all of this. The only major segment under stress is US housing. Housing
prices in Europe, Asia & SA are still in a bull market. I just can't see how the Fed can drop rates
in the foreseeable future. I think the stock market realized this causing the 8% correction in SPX.
"Money cannot consistently be made trading every day or every week during the year." ~ Jesse Livermore Trading Rule
