I am certain the mania surrounding this week’s Fed meeting will rise to a cascading crescendo.  Even though I do not believe in this next comment, to write about anything else would be essentially meaningless.  I again ask if a 0.25% increase makes a project economically unviable, why build that project?

To reiterate, the markets have been co-opted by cross correlated technology based trading where interest rates are a primary variable.  Higher interest rates dictate lower prices thus the intense focus.

Will the Fed act?   Unfortunately Wall Street has been spoon fed by the Federal Reserve and many market participants believe the central bank is both omnipotent and omniscient, either of which is true.

What makes the Federal Reserve different than their private sector brethren is its ability to target short term interest rates.

Consensus is expecting no change.  The futures markets is suggesting less than a 14% probability.

Last night the foreign markets were up.  London was up 1.42%, Paris up 1.49% and Frankfurt up 0.81%.  China was up 0.77%, Japan up 0.70% and Hang Sang up 0.92%.

The Dow should open moderately higher on speculation that the Fed will remain unchanged Wednesday.  Oil is higher on speculation of next week’s OPEC meeting in Algiers.    The 10-year is unchanged at 1.69%.


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