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Fed Meeting Scenarios are Really Quite Simple

Posted by WorldWideMarkets . on Sep 18, 2013 3:19:00 AM
Many scenarios being bandied about for the Fed's decision today but simply put the two most likely are the Fed does nothing or it begins to taper. The first scenario may see the dollar sell off in a knee-jerk reaction but then investors will just begin to look to the two remaining meetings of the year so the flows underlying the dollar will return. The second scenario is that the Fed does announce it is cutting its stimulus measures with the question being by how much? Forecasts are for cuts of as little as $10 billion or as much as $20 billion off the current $85 billion a month in asset purchases. The dollar will most likely rally in either case. There is a small chance the dollar sells off on a buy the rumor sell the news trading scenario but that is likely very short lived. The market wants the Fed to taper, it has priced in a tapering scenario and investors will reward the dollar if the Fed acts. Trading The Ben Bernank

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