FYI – I am on the road the next 2 weeks so postings will be somewhat irregular.
Predictions are tough, especially about the future. But, I am starting to think the Fed meeting Sept 17-18 will either be:
- A Non-Event: Everyone expects a taper. They taper. The market shrugs and goes on its way.
- A Mild Positive: It is possible they don’t taper. In that case, people just shift their taper expectations to the December meeting and realize that not much has really changed. Or they do start to taper, but issue a more aggressive statement to alter future tightening expectations. The Fed seems to be trying to communicate that the end of the taper does not signal the end to loose policy. I am not sure that has gotten across so they might say it more forcefully.
Whatever the Fed says, I expect attention will shift rapidly to the debt ceiling debate. Per my post on Monday, I think this game of chicken could get a whole lot closer to the cliff than many believe. See link below.
What if Obama Wakens the Balrog? Markets are Too Complacent on the Debt Ceiling.
