Tomorrow, the Fed will end its two-day meeting with an announcement on whether to raise rates or leave rates unchanged. One month ago, it was all but certain that the FOMC would raise rates one more time this year and that we should expect three or four more rate hikes in 2019. However, current odds of a rate hike tomorrow are down to 71%. Apparently, there are some in the market that believe the Fed will leave rates unchanged due to recent softening data and concerns about the overall global economy’s strength. The stock market has also been throwing a major “taper tantrum” along with President Trump. Presidential bashing of the Fed chairman is not good for the market. The Fed must act independently, their only concern should be to avoid a financial crisis. I believe the Fed has also put a little too much emphasis on transparency in an effort to not surprise or disrupt the financial markets. With that thought in mind I believe that the Fed will raise rates tomorrow. They’re afraid of surprising the market. So look for a rate hike tomorrow and some nasty tweets from President Trump and the stocks to continue to slide lower. We will need to see some good data on the economy before the stocks are able to recover.

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Frank J. Cholly

Senior Market Strategist

Frank is a swap registered trader who brings his clients more than twenty-six years of commodity futures experience. He was a member at the Chicago Board of Trade for 10 years where he filled orders in the grain and financial pits. Frank was also a Lind-Waldock's floor manager for ten years and later joined on as a commodities broker.

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