As of this morning the odds of a Fed hike today are 18%, up from an unusually steady 15% for a week.
At this point, what difference does it make? A 1/4 point hike will not start a recession (but it might get blamed for one). A 1/4 point hike cannot undo the bubble in equities and bonds the Fed and central banks have blown.
The economic data at this point does not even support a hike, so if the Fed hikes it will be because they want to.
Supposedly the Fed wants to maintain its credibility. But what credibility does it have? What credibility did the Fed ever have?
- Did the Fed see the dotcom bubble?
- Did the Fed see the housing bubble?
- Did the Fed see the great recession?
- Did the Fed see any recession, ever?
The Fed is not fighting to preserve its credibility. The Fed is fighting to preserve an illusion of credibility so the mainstream media puppets and stock cheerleaders can all go “ohhhhh, ahhhh”.
I Expect to hear the word “vigilant” today. If so, the market will go “gaga” over it. And media will latch on to the word, as if it is a guaranteed signal a hike is coming in December. But it will be no more meaningful than this Tweet.
Yesterday I predicted the Fed won’t hike. For discussion, please see Hike Tomorrow? Two Foreign-Based Fed Primary Dealers Bet Against Consensus
I prefer to be wrong. Why?
Because I am tired of the endless debate and meaningless focus on when the Fed will hike. So please Fed, hike.
The sooner the Fed hikes, the sooner we can move on to the real discussion: when the Fed cuts.
Mike “Mish” Shedlock