Monday, October 29, 2007

Nightmare on Wall Street

When the Ben Bernanke's FOMC releases their benchmark interest rate decision and statement this Halloween at 2:15PM ET something will die. The big question is, is it going to be the US Dollar or the US stock market? Recent actions indicate that Bernanke wants to be Freddy Kruger this year and shred the US dollar, which is already in free fall, by cutting interest rates. On the other hand, the fed knows inflation is picking up like crazy (look at food and oil prices) and there is always a possibility they could go back to their hawkish bias. A return to hawkish mode would send the stock market into a grave while saving the dollar. We will all be watching at that fateful hour but don't hold your breath for things to be all dreamy after they do whatever it is that they do do.

Disclosure: I am Long FXY (Japanese Yen) Calls, more on that later.

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