Fed Faces Rate Decision Conundrum Amidst 88% Hike Probability

Mike McGlone notes an unusual circumstance ahead of this week's Federal Reserve meeting. The Fed may break precedent by holding interest rates, even though futures are pricing in an approximately 88% probability of a 25 basis point hike just one week before the decision.

This scenario has no well-documented precedent, as the Fed typically hikes rates when futures indicate such a high likelihood of a rate increase. McGlone's observation reflects his consistent tracking of market positioning during key events.

McGlone previously compared gold's surge to $5,600 an ounce in the first quarter to crude oil's rally in 2008, citing strong commodity trends. He also observed that hedge funds held about 24% of corn futures open interest, a level typically associated with liquidation risk, as detailed in his report on corn futures.