The market was very quiet for the most part this morning. The action should pick up later in the day after the Fed makes its statement and we see where rates are going to be heading going forward. A .25 cut seems to be the most common prediction on what they do with the FF rate.
One quick thing I wanted to talk about that might pressure the Fed with its decision today is the increase in food prices that are causing riots all over the world. The Wall St. Journal reported yesterday that our low rate monetary policy causing many of these issues with the rising costs in food.
The reason for this is because commodities are dollar based. As our dollar decreases in value it increases the cost of food for poorer nations. Food is a much larger part of an average workers budget in countries like China and India. When you see stories like this from Bloomberg, you realize this is a large issue and prices are still rising.
So now we have the Fed being pressured to cut rates by Wall St to save the banks, and they are getting pressure from the rest of the world to do the opposite so people don't starve.
Its a very difficult spot for the Fed to be in and it will be interesting to see what they decide to say today.
The data was pretty solid today on the economic front. GDP was reported at .6 for the first quarter and earnings weren't too bad from several companies. Much more later as we see the markets reaction to the Fed and what they decide on rates.
Have a great day.