The likelihood of a hike at next week’s FOMC meeting is now just at 11%. Based on the varying messages that the various Fed Governors have conveyed at their multifarious speeches this last week, it’s clear that as a body they are unclear on the future of the economy. The lower prospect of a short-term rate hike combined with lower oil prices are weighing heavily on stocks and bonds, which are both down so far this morning. Fannie Mae Bonds are only down 3bps, while the DOW has fallen by over 200 points.
This photo is supposed to connote the markets taking a breather, but I don’t think that they are as calm as the depiction suggests.