zerohedge.com /by Tyler Durden / Sep 21, 2016 12:58 PM
With stocks gapping higher at the open for a third day, only to drift lower, the reason may be that Wall Street, which has priced in negligible odds of a rate hike – at only 22% – is suddenly sweating.
Indeed, with just one hour left until the Fed’s decision and with just 4 of 102 economists in Bloomberg survey predicting Fed will raise rates today, the last minute mutual assured destruction warnings have come out, with strategists cautioning that a surprise increase would lead to a sharp drop in risk assets, and trigger large moves across the curve which would flatten dramatically, while others make case for steepening and wider credit spreads.
In short, if Yellen does for some reason surprise – and remember that the Fed has almost never hiked when the market implied probability was below 70%, nobody is prepared.
Here, courtesy of Bloomberg, is the gaggle of sellsiders uttering their last minute warnings just in case Yellen does decide to turn against Wall Street:
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