Rate Hike Odds Surge As GDP Forecasts Collapse – Ep. 232

* According to Goldman Sachs, the odds of a Fed rate hike coming up at the March meeting, which is less than 2 weeks away is now 95% * It was 90% before Yellen spoke, that was looking at the Fed Fund futures, in fact the probability of a rate hike had been rising all week based on speeches of a number of Fed officials * Everyone indicating that a rate hike was coming soon * Nobody actually said how soon * But they kept talking about why raising interest rates would be appropriate * Why they didn't want to wait too long * But of course they always reiterate that they want to proceed slowly * And of course, that they are data dependent * Meaning that in order to deliver these rate hikes that they claim would be appropriate * They will be slowly applied over some abstract period of time and * The economy has to evolve according to their expectations * Which probably is not going to happen * But nonetheless, when Janet Yellen spoke, this was the last opportunity that a Fed official had to kind of dial back those expectations * If Yellen didn't like the fact that the markets were 90% sure of a March rate hike * She had the opportunity to dial that back in her rhetoric * And she did not * She allowed the markets to continue to price in a rate hike in the March meeting * And that is why, now, the odds went from 90% to 95%, which is virtually a lock * Which means that barring any huge drop in the stock market between now and the March meeting * That hike's probably going to come * Because I think that the reason the Fed feels confident to raise rates is that the Dow is at 21,000! * Just like it felt confident to raise interest rates the first time in December of 2015 because the markets were giving a false signal that rate hikes were OK * And, of course after the rates were hiked, the market thought about it again, and it dumped * And then we had the worst January in the history of Janaries * And the Fed waited until the following December to raise rates againOur Sponsors:* Check out Chilipad and use my code GOLD for a great deal: https://sleep.me* Check out Fast Growing Trees and use my code GOLD for a great deal: https://www.fast-growing-trees.com* Check out Plaud AI and use my code GOLD for a great deal: https://plaud.ai* Check out Quince and use my code quince.com/gold for a great deal: https://www.quince.com* Check out Quince and use my code quince.com/gold for a great deal: https://www.quince.com* Check out TruDiagnostic and use my code GOLD20 for a great deal: https://www.trudiagnostic.comPrivacy & Opt-Out: https://redcircle.com/privacy