We know rate cuts will be happening next week. We could either be getting a 25bps or 50bps rate cut.
But the main question is, what has the markets priced in already? Do you think we have already priced in a 50 point cut and see a massive sell off happening after rates are cut? Or do you think we will be seeing small profit taking but a continued rally?
Contemplating if I should exit my positions and sit on cash
Posted by Another_Yeti
28 Comments
Don’t know. No one does
Wish I did know
No, markets are full on gamble mode until something breaks
Some of it is probably price in, but I don’t see this as a buy the rumor/sell the news event.
When this rate cuts happens it kicks off not just a rate cut but a series of rate cuts.
Printer goes Brrrr and stonks go up!
How the fk do you think anyone has the answer to this?
With all the indices people anticipate that already including mortgage. If not then we are in a correction territory.
Maybe we don’t get a rate cut?! Haha
Stagflation until zirp. Fed doesn’t print greenbacks until zirp is achieved.
Priced in. 20% crash sell the news and 50% crash if less than 50bps
25 base points cuts and sell off on 17th. Got spxs calls for 19th. 2¢ to 1$ profits.
Vagina boob
For all the excitement of this week, IWM was about flat and is struggling around prior ATHs and bonds reversed the rally from yesterday.
I will say though that I’m completely clueless on where the Nasdaq stops. Might just grind until late this year before it gets in trouble, if at all.
Liquidity is about to spike. The dollar is about to drop. Yields are falling back. Small caps are breaking out. Bitcoin is turning up. Al is taking over everything.
you’re bearish on asset markets?
I hope he is like suprisee motherfuckas we have decided raising rates will be the most fiscally responsible thing to do.
How could it not be priced in? We have literally popped on a September rate cut being likely half a dozen times already this year.
People have been expecting a September rate cut since Biden was president.
Sell the news, then dip gets bought. Up and to the right.
Well, I’m buying some lotto far OTM spy puts just in case there is no rate cut next week
Right now we’re fully leaning into the ‘buy the rumor’ phase, since the market has been waiting in anticipation for a rate cut. Once that happens we switch gears to the ‘sell the news’ portion for the rest of the month into October. At some point either middle of October or late October the market switches back to ‘bad news is good news’ and we skyrocket through the rest of 2025. Calling it right now.
Fingers crossed a 25pt cut sends SoFi to +$30
I’m worried it’s priced in or a sell the news event next week
Pretty much everything is always priced in before you have a chance to trade on it.
Never a good decision to sit on cash
To everyone saying that it is impossible to know this… You are wrong. It is actually very simple to see if the market has priced it in already. Just look at short term bond rates. If they are below the current fed funds rate, then obviously the market is literally pricing in a rate cut.
Right now, the Fed Funds Effective Rate is 4.33%. One month T-bills are at about 4.2%, 13-week t-bills are about 3.9%. 2-year T-notes are at about 3.5%.
Think about it logically. People are literally bidding up the price of bonds such that the yields are lower than the current fed funds rate. Why would they do that?
Edit: you can also take the analysis further and look at Fed Funds futures (check out The CME FedWatch Tool) which can help estimate the probability of a rate cut based on Fed Funds futures pricing. Currently the target rate probabilities show that there is a 93.4% chance of a rate cut of 25 basis points, and a 6.6% chance of a rate cut of 50 basis points. That means there is a 0% chance that rates will stay the same, according to the implied probability of futures pricing.
Why would you go into cash when the fed is going to make equities the only thing worth holding money in?
My instinct is that some are and some aren’t so it’s probably not worth deviating from my normal strategy about it.
Market expects a rate cut. But if Powell doesn’t cut, watch out below
This rate cut is likely the first of 3 or 4 in the next 4 fed meetings. We could be a point lower by end of January. It would be unwise to sit in cash.
Look at betting markets. Not only is a rate cut priced in, but the market thinks the potential for a double rate cut is more likely than no cut.
https://kalshi.com/markets/kxfeddecision/fed-meeting#KXFEDDECISION-25SEP
I *suspect* the market might be starting to price in the SCOTUS overturning tariffs.
.25 priced in