Forget Hikes - Rate-Cut Odds Soar For September As NIRP "Bets" Hit Record High

Tyler Durden's picture

Despite a modest bounce today, the collapse in stock prices and bond yields since the 'non-event' "won't affect our market" Brexit vote has sent market-implied rate-hike odds careening lower. In fact, there is now a 0% chance of a rate hike to November and a 23% chance of rate-cut in September with December (post-election) rate-hike odds just 7.7%!!! Fed Credibility is official dead...

Fed rate movement expectations have collapsed...

 

With stunning 23% chance of cut now in September...

 

And market bets (Par Eurodollar Call Open Interest) on NIRP in 2017 are soaring to record highs...

 

Charts: Bloomberg

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knukles's picture

Oh come on.  Quit joshin' me.
Yer kiddin, right?
Those numbers ain't low enough for where we're gonna be before this insanity ceases.
Overestimate a financial non event like Brexit and Under Appreciate just how deep the deep shit really is. 

nibiru's picture

Man think about the FED and how much they love to print.

"It is total tabloidization of financial markets. First, we saw it in politics, now we can clearly see it in FED's policy. Janet is here to just create this headline porn and markets are excited enough to carry on with 'new gospel' every time she opens her mouth.

It's ridiculous. She, by far can be the knight in white armour and rather would cut the rates down to NIRP just like Draghi and Kuroda - to bail out cronies than she is really interested in following logic. Anyways her increasing rates would push the economy into recession - it's just matter of time not 'if'.

http://independenttrader.org/was-the-last-euphoria-the-harbinger-of-rate-cut-and-qe-in-the-us.html"

True Blue's picture

Ahh, but Brexit will make such a wonderful excuse, won't it?

Plausible deniability for the elite "-see; you proles brought this about yourselves -despite our 'warnings' of what would happen."

"We tried our best to save the economies of the world (by stealing even more) through negative interest rates and giving away 'free' money, but the 'infection' spread through the system. All because you little people thought you could possibly know what was best for you and your future."

Joe Cool's picture

I should have bet on this one...We all should bet of course...

doggis's picture

AND THERE YOU GO - "MARKETS NO LONGER HAVE ANY ABILITY TO PREDICT"!

CAN YOU TELL ME "HOW" YOU CAN HAVE NIRP WITH THE WORLD RESERVE CURRENCY?

HOW CAN YOU HAVE A ZIMBABWE STYLE MONETARY POLICY WITH THE  WORLD'S SAVINGS AS "RESERVE" BEING ENTRUSTED TO THIS CURRENCY??

 

N0TaREALmerican's picture
N0TaREALmerican (not verified) doggis Jun 28, 2016 3:12 PM

 

Donald Rumsfeld said "The US creates its own reality".    Maybe that would work again? 

knukles's picture

Methinks that created reality may be fraying about the edges.

NoDebt's picture

Ask Japan.  They know.

Smerf's picture

10 aircraft carriers and 2000 nukes.

SHEEPFUKKER's picture

"CAN YOU TELL ME "HOW" YOU CAN HAVE NIRP WITH THE WORLD RESERVE CURRENCY"

 

Answer: By having the world's largest military/spy state/police state.

back to basics's picture

"At this point we need to ask the question, what is money?"

- Jim Grant - Interest Rate Observer 

knukles's picture

"It's what's in my pocket.  Right next to the lint balls"
                                -Paul Krugman

gmak's picture

Bullish for deflation (NIRP that is).

silverer's picture

Oh, no hike? More NO2! The wall is coming up!

booboo's picture

Doin Gods work

scintillator9's picture

Most seem to never ask which God the work is being done for.

Mammon would be my guess.

 

True Blue's picture

Oppenheimer told you.

Shiva, Destroyer of the World.

jakesdad's picture

was just telling my boss this morning I'm kicking myself I didn't buy MORE of the recent ag dip!!!

ThisUsernameFollowsTheRules's picture

Central banks have exercised a heroic amount of restraint which is the only reason the system is still going. Logically, when borrowing costs are negative, you would borrow ALL the money. If i had an offer in the mail, -1% interest, borrow any amount, I would request several trillion dollars. They did that. Now the logical follow up is, 100 trillion dollars. The fact that you have an entire swathe of governments borrowing at negative rates and none have decided, i would like to borrow ALL the money, well it's really incredible. 

Hohum's picture

Stil have to pay the principal, or at least near 100% of it.

john_connor's picture

NIRP is the explicit destruction of capital, therefore the opposite of, and inimical to any semblance of capitalism. 

whatamaroon's picture

Two observations no matter what. Janet Yellen has vajay and at her age sagging breastasees which mean even if she has a dick or she is a lesbian her 'feelings' about intrest rates were wrong!

Elliott Eldrich's picture

Headline should have been "Fed Cred Dead"