TBT, Interest Rates, Update. U.S. Federal Reserve Meeting Results Wednesday

Contrary to popular belief, the U.S. Federal Reserve does not set rates. Historically the pattern is that at best the Fed influences or correlates rates. The bond and Treasury markets is where rates are truly set.

That said, tomorrow's two-day Fed meeting results - or more accurately the emotional reaction - could result in unusual volatility in the short term. 

Here's our most recent posting on TBT.  The chart hasn't changed much:

We'd written that "we'll probably add to double the position if TBT starts to close above the green line shown in the chart above ($70)." 

While TBT did since close slightly above $70 once, we've not yet added to our position and feel it's prudent to wait on the Fed meeting results and reaction tomorrow before committing more funds to this idea.

Here's how long and shorter term rate charts look today:

We'll update again once the dust settles post-Fed announcement.


Interesting links:

Doomsday poll: 87% risk of stock crash by year-end

Gold Traders: Don't Ignore These Odds (video)

PowerTalk: What You Need to Know as the Fed Gets Ready to Taper its Stimulus: Advice from Experts Douglas Holtz-Eakin and Diana Furchtgott-Roth

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