The Federal Reserve left rates unchanged at their September meeting. Many market participants in all markets were expecting a rate cut today. In the accompanying statement they basically said, that things were rough, inflation was something to keep watching, and that the committee is watching financial developments.
The US Dollar whipsawed as traders repositioned themselves with the rate cut being off the table. Carry trades showed a sharp recovery with some risk being accepted back by market participants.
While no one knows whether the Fed will end up cutting rates in the future, they held strong today. It is expected that there will be news later today about AIG and whether they will be bailed out. That should spar another huge round of volatility, so the show isn’t over. AIG is expected to either be bailed out or go bankrupt sometime the next 24 hours, so stay tuned!
The US Dollar whipsawed as traders repositioned themselves with the rate cut being off the table. Carry trades showed a sharp recovery with some risk being accepted back by market participants.
While no one knows whether the Fed will end up cutting rates in the future, they held strong today. It is expected that there will be news later today about AIG and whether they will be bailed out. That should spar another huge round of volatility, so the show isn’t over. AIG is expected to either be bailed out or go bankrupt sometime the next 24 hours, so stay tuned!
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