FOMC Day: Sep 20, 2017

Welcome to another FOMC day.  If you read yesterday’s post, there is absolutely nothing new to report today.  SPX, DJIA, COMP, NDX and NYA are all at or near all-time highs, while XLF and RUT are at important resistance.

As usual, there has been much speculation regarding the Fed’s future plans.  As usual, the FOMC will do its very best to not upset the markets.  What does this mean?

While they would love to see a steeper yield curve, more robust growth and higher inflation, everyone knows we can’t afford higher rates — hence the US dollar’s steady decline and an unwritten policy to keep inflation near, but no higher than, 2%.

Since the dollar has been in a funk, the yen carry trade hasn’t worked so well of late.  And, since higher oil and gas prices could push CPI above 2%, that particular avenue has been of limited use.  Fortunately for bulls, hammering VIX has done an excellent job of driving algorithms and the 90% of share volume that they steer.

Chances are, today’s the day we find out whether or not our assumptions regarding interest rates, inflation, currencies and equity prices make any sense.

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