Powell says the Fed doesn’t need to be ‘in a hurry’ to reduce interest rates

Published Thu, Nov 14 20243:00 PM EST

CNBC

@chrisjbillington @EvanDaniel

I see you both weighed in on this thread already, but it doesn't look like anyone has said anything about how to specifically rule on these various options.

1. I'm going to resolve "One, third quarter" to No. There have been two cuts in 2024. Even though there was one in the third quarter, there have been two cuts in 2024 so far, so this answer cannot resolve Yes.

2. I am not going to resolve the answer "Two, early Summer and early Fall" yet. There have been exactly two rate cuts so far, but there could be more before the end of the year. If we do end the year with exactly two rate cuts then this answer could resolve Yes, because the number matches but I suspect at least one user would protest because the timing was "late Summer and mid-Fall", so there would be a legitimate ambiguity.

3. I am not going to resolve the answer "Three, about one each quarter until the election", because there is still a chance we end the year with exactly three rate cuts. If we do end the year with exactly three rate cuts, this answer could resolve Yes because the number matches, but I suspect at least one user would protest due to the mismatch in timing, so there would be a legitimate ambiguity.

Long story short: Looks like two of these are basically guaranteed to resolve No, and trade at your own risk on anything else.

Anyone dying to have trading reopen?

@fabienneparker Election Over , only 1 time lowered in September (3rd Quarter)

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Press Release

 PDF

September 18, 2024

Federal Reserve issues FOMC statement

For release at 2:00 p.m. EDT

@DistinctlySkeptical "in 2024"

The answers are badly chosen/worded which means someone will have to decide how to resolve this. Resolving based only on cuts prior to the election doesn't seem reasonable to me given the title.

@fabienneparker @mods

@mods User has been gone 3+ months.

@fabienneparker Only 1 will have happenned by election. 2 if you include a November cut, If it happens.

No way for 3 cuts before election and not possible for "about one each quarter until the election"

Essentially all options should resolve no on this particular market.

@mods

@DistinctlySkeptical please answer me on discord

@DistinctlySkeptical Why is an emergency rate cut between now and the election impossible? That seems like a fine argument to bet down that option, but not to resolve it now.

The Fed first cut rates in September, so there is no way it can resolve to “Three, about one each quarter” unless you reaaaaly stretch the definition of what a quarter is. September is not Q2. Maybe you can clarify if three cuts overall qualify in the spirit of the question, even if they are in Sept, Nov, and Dec.

@Parker

@fabienneparker how will this resolve if it's e.g. three cuts, but all of them are in the last two quarters?

None?

The most likely outcome right now is Four

@Pepe Wondering why you think that.

Unemployment is still at 3.7%, producer prices just came in hot, https://apnews.com/article/inflation-wholesale-prices-consumer-federal-reserve-rates-68045213d11f1b2d5df41e0cdebe4955, and Core CPI is still close to 4%, https://www.barrons.com/livecoverage/cpi-inflation-data-january-report-today.

Do you think delaying the cuts will cause them to accelerate their pace?