What's the Trade as Bernanke and the Fed Face a Fork in the Road?
Big Ben Bernanke speaks tomorrow and Wall Street is on edge. Investors will be scrutinizing his every word, searching for hints as to what the central bank may do later in the year. Creeping inflation calls for a rate hike but the oozing sub-prime slime calls for rate cut relief. As Ben's carefully composed prose spills the beans on which will win out, which way to the fast money?
CNBC’s Steve Liesman joins the guys for the discussion and says The Fed is in a vice, in fact a double vice. The first – if the fed bails out the economy it bails out the vice of bad lending. The second – inflation is still high, but the economy is weaker.
Dylan asks what will The Fed do tomorrow.
Steve replies they will note the sub-prime weakness and housing weakness, but won’t do more.
Eric Bolling adds that The Fed can’t raise rates or it will put a torpedo in the housing sector. He adds that it’s okay to be in this vice and feels things are fine just the way they are.
Guy Adami agrees with Steve Liesman, the market will like what Bernanke says and the market will probably move higher, tomorrow. But, reminds Guy, at some point Bernanke has to address the inflation comfort zone.
Jeff Macke says the Fed is frozen and that’s the way he likes it. They don’t have to bail out the housing market. Jeff says the politicians will line-up to do that.
Eric Bolling adds that markets love Ben. He recommends owning stocks, owning S&P futures(US @SP.1) and Nasdaq futures (US @ND.1), however he’s not sure if it’s that’s a long term play.
Tim Strazzini agrees that the Fed will have to make comments that eliminate the likelihood of raising rates, but they will also need to be respectful of inflation. Tim anticipates the morning will be strong and, after The Fed meeting at 2:15pm, the market will go lower.
Dylan Ratigan says the bottom line is most of the Fast Money traders anticipate tomorrow to be bullish although Tim Strazzini advocates caution after 2:15pm.
On MAR 20, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders Bolling Owns (DIS), Gold, Silver, Soybeans is Short Corn. Strazzini Owns (HAL), (YHOO), (MER), (VZ)