On Tuesday, investors will be eager to hear the tone Ben Bernanke uses at the regularly scheduled FOMC meeting. There’s speculation the Fed may be thinking about cutting interest rates again.
In fact, amid the turmoil in financial markets, more and more traders are betting on a rate cut and that it could happen before the end of the year. Just look at the action in interest rate futures, which have now swung from a rate hike bias toward a rate cut bias.
Specifically, the implied prospects for a Fed rate cut by year-end hit a new cycle high of 36 percent after the data, up from 28 percent late on Thursday.
In other words, more investors now think the Fed is less worried about inflation more concerned about growth.
But traders might not be in sync with the Fed. “I think the Fed’s message next week will be expect rates to remain the same, explains Wayne Angell, former Federal Reserve Governor on Fast Money. “The Fed is a lot tighter than hardly anyone presumes. I expect us to be at two percent at the end of the year, and two percent 12 months from now.”
We’ll be watching, and listening.
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Trader disclosure: On Sept 12, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (WMT), (MSFT), (UUP); Macke Is Short (TM); Seymour Owns (AAPL), (F), (GM), (MER), (SHLD), (TSO); Seygem Asset Management Owns (EEM); Najarian Owns (AAPL) And (AAPL) Collar; Najarian Owns (GE) Put Spread; Najarian Owns (HOLX) Calls; Najarian Owns (MS) And Is Short (MS) Calls; Najarian Owns (NOK) And Is Short (NOK) Calls; Najarian Owns (RIMM) Call Spread; Najarian Owns (TSO) Call Spread; Najarian Owns (XLF) And (XLF) Collar; Terranova Owns (AAPL),(RIMM), (GS), (VLO), (SA), (YHOO), (NOV), (POT), (EOG), (FCX), (X); Terranova Owns (AIG) Puts And Owns (AIG)
Terranova Is Chief Alternatives Strategist Of Phoenix Investment Partners, Ltd.; Phoenix Investment Partners Owns More Than 1% Of (ABD), (ARE), (BIG), (BRE), (CNTY), (CNW), (CLB), (OFC), (DLM), (DRH), (DLR), (EPR), (ESS), (EXR), (AGM), (FL), (GBL), (GNET), (IGE), (LNET), (MAC), (OIIM), (PSPT), (DBC), (DBV), (SLB), (GWX), (SSYS), (SKT), (UA), (BIV), (VV), (BLV); Phoenix Investment Partners Owns More Than 1% Of Goldman Sachs Financial Square Fund - Money Market Fund; Phoenix Investment Partners Owns More Than 1% Of Seagate Technology Tax Refund Rights
Terranova Is Co-Portfolio Manager Of The Phoenix Diversifier PHOLIO; Phoenix Diversifier PHOLIO Owns (IGE), (DBC), (DBV)
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