Howestreet.com - the source for market opinions

ALWAYS CONSULT YOUR INVESTMENT PROFESSIONAL BEFORE MAKING ANY INVESTMENT DECISION

February 27, 2020 | The Fed Will Cut Rates on March 18

Mike 'Mish' Shedlock

Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.
It’s now baked in the cake. The Fed will cut rates on March 18 and most likely at least twice more.
According to CME Fedwatch the odds of a rate cut in March jumped to 96.3% today from 8.9% a week ago.Looking ahead to December, it’s highly likely at least two additional cuts are on the way.

December Rate Cut Probabilities

December Implied Rate Cuts Probabilities vs Current FF Rate

  • At Least 2 Cuts: 96%
  • At Least 3 Cuts: 77%
  • At Least 4 Cuts: 40.6%

What’s Happening?

  1. Feb 19: Fed Minutes Highlight Coronavirus Concerns and Uncertainty 8 Times
  2. Feb 24: Bond Yields Crash and Gold Soars on Pandemic Threat
  3. Feb 25: CDC Admits Spread of Coronavirus in the US Appears Inevitable
  4. Feb 25: Lie of the Day: This is Not a Pandemic
  5. Feb 25: Nearly 50% Odds of “At Least” 3 Rate Cuts by December
  6. Feb 26: Trump says We are “Very, Very Ready for the Coronavirus, for Anything”
  7. Feb 27: Useless Act: California Monitors 8,400 People for Coronavirus; 33 Test Positive
  8. Feb 27: Containment Fails: Coronavirus Tweets of the Day

Rate cuts odds started rising before coronavirus threat materialized on news Largest Global Shipping Decline Since 2009.

Mike “Mish” Shedlock

STAY INFORMED! Receive our Weekly Recap of thought provoking articles, podcasts, and radio delivered to your inbox for FREE! Sign up here for the HoweStreet.com Weekly Recap.

February 27th, 2020

Posted In: Mish Talk

Post a Comment:

Your email address will not be published. Required fields are marked *

All Comments are moderated before appearing on the site

*
*

This site uses Akismet to reduce spam. Learn how your comment data is processed.