By the time you read this, the Fed Open Market Committee (FOMC) has probably raised their benchmark Fed Funds rate and given guidance for the next few years. More importantly, everyone has freaked out one way or the other and the stock and bond markets have probably done something that has everyone puzzled.
We still live in a financial world that defies expectations. It has to be “experienced”, just like the various things you did in your mis-spent youth that built “character”. The question becomes – what great wisdom are we learning from all of this?
The stock market ended down for a sixth day in a row, with the S&P500 at 1869. It’s right at the low from last October of 1862, meaning that we either find support here or look out below. To date, it’s off 12.2% from its 2130 peak.
The bloodletting has one thought on everyone’s mind, at least the one thing other than “When does it stop?” The question of the day is “Does this kill the Fed’s desire to raise interest rates?”
The market was betting against a rise before, and it’s more convinced than ever that a rise in the Fed Funds Rate is not coming. But there should be a rise for one very strange reason – it may actually lower interest rates and stimulate the economy. Seriously. We’re still in Bizarro Economic territory and this could be the moment we finally get out of it.