Wednesday, Sept 18, 2024

FOMC countdown, the bigger story today, the dollar threat, blinkered BTC narratives and more

“We drive into the future using only our rearview mirror.” – Marshall McLuhan   ||  

Hi everyone, and happy Fed Day!! Oh, the suspense…

Below I talk about what will really matter later today – it’s not so much the size of the cut (although that is significant), it’s the dot plot and other projections. I also vent a little (?) about blinkered BTC narratives. And I share a link to a House hearing you might find cathartic.

IN THIS NEWSLETTER:

• Countdown time

• The bigger deal

• BTC does not follow just one narrative

• SEC spotlight

If you’re not a premium subscriber, I hope you’ll consider becoming one! It’s the price of a couple of New York coffees a month, and you get ~daily commentary on how macro moods are influencing crypto markets, and also on how crypto is impacting the macro economy.

WHAT I’M WATCHING:

Countdown time

With just hours to go, the odds on today’s FOMC rate decision are still 60/40 in favour of a 50bp cut rather than a more modest (and sensible, in my opinion) 25bp move.

(chart via CME FedWatch)

According to a chart from John Authers’ newsletter yesterday, today’s decision, whatever it is, will be the biggest market surprise in decades.

(chart via Bloomberg)

And yet risk indicators are showing a surprising level of calm. The VIX volatility index is being remarkably well-behaved (look how narrow those candles over on the right are).