RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

As we know, the markets are always in a dynamic state, that is to say, constantly changing. We call this phenomenon phase transition, which means something is moving from one state to another. What complicates this is when there are multiple phase transitions happening at once, which is what we are seeing in the current marketplace. Markets are in a period of transition from a state of inexpensive capital and zero rates to a period of more expensive and risky capital due to the Fed raising rates.

Another factor in these multiple phase transitions is the rising feeling of nationalism and the U.S. trade war with China. This war has greatly affected our imports and exports which is creating more volatility in the markets. Bluford Putnam provides great insight on what the future may hold if these phase transitions continue.

In the midst of these phase transitions, we have the Federal interest rate watch to worry about. One of the major causes of these phase transitions has been the Fed raising short-term interest rates. In December 2018, the Fed raised rates for a 4th time and have another big decision in 2019 on whether to continue raising rates or to stand still. At the beginning of 2019, The CME  predicted that there would be no more rate increases in 2019, and at the conclusion of the FOMC meeting it even showed we could be in store for a rate cut in January 2020. Listen to Bluford Putnam as he provides a detailed monologue of what we can expect from interest rates.

RJOF Editorial Team