No matter what, it's going to be a close-call...
Fed members notably split
[9]
And investors’ conviction of rate hikes in 2015 has been drifting...
[10]
Market pricing of the timing of lift-off has fluctuated in a wide range this year:
- Market has priced 20-100% hike odds by Sept.
- Odds of 2015 hike fluctuated between 50-100%
Key data releases have led to big shifts in market pricing as Fed emphasised data dependence
- Strong January employment data led markets to fully price hike by September
- Dovish March and June FOMC meetings led to lower odds of a hike this year
Current market pricing suggests 30% odds of a hike in September and 75% chance of lift-off this year
Low market pricing likely lowers chances of a hike in September
- Fed would like to avoid surprising the market
- Hiking against market expectations in September means greater volatility and more tightening of financial conditions than desired
Economisseds remain split...
[11]
But then again - they have been clueless...
[12]
And as Ransquawk notes, the various banks are also split down the middle on whether The fed should hike or not next week...
NO HIKE: BarCap, BNP, Credit Ag, Credit Suisse, HSBC, GS
HIKE: BoFA, Deutsche Bank, JPM, RBS, Wells Fargo
Here's why Deutsche Bank thinks they should raise rates in September...
[13]
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Finally, this is the most important chart for the next few days...
[14]
h/t @Not_Jim_Cramer
Simply put - The more you buy stocks, the higher the probability of a turmoil-creating rate-hike next week - that's the Dow-Data-Dependent Fed at work folks!!