All Roads Lead to Rome...And The Fed

There is little point in bemoaning or bellowing over the fact that all market roads seem to lead to The Fed these days. Simply put, it is one of the main byproducts of the response by The Fed and then-Chair Ben Bernanke to the financial crisis back in 2008/2009. 

Back then, in the most dire days of that bear market, investors where begging and pleading for Fed intervention (namely QE and ZIRP) until they finally got it. But it is a classic case of one needing to be careful what one wishes for, since the market now assumes The Fed will always bail it out, even during an inflationary regime with higher rates.

Either way, with the FOMC tomorrow afternoon, followed by Chair Powell's press conference, we will finally ascertain if Powell is at least entertaining the idea of rate cuts into 2024 like the market expects him to not only consider but act upon. As you know, I remain firmly on the other side of that view, and am patiently looking to add back to a short in Treasuries (a bet on higher rates) which was my biggest position for most of 2023 up until October.  

Case in point: I highly doubt bulls would be chasing up the likes of AVGO here unless they were cocksure a new rate cutting regime would be enacted in 2024. 

As for commodities, I see more dipping in front of the FOMC which could easily set up a sell-the-rumor/buy-the-news scenario if anything dovish comes out of the event tomorrow.

On that note, we know Powell has not exactly been a profile in courage as Fed Chair. So, I am still looking for the dip in commodities and commodity stocks to be bought.