### POV: COUNTER TO THE "FED PUT", HOW......>

OPTIONS: ### POV: COUNTER TO THE "FED PUT", HOW ABOUT THE "TRUMP CALL"? 

- While a dual mandate and strong economy have conspired to put the

data-dependent Fed on the current hiking path. Have US President Trump's tweets

criticizing the Fed and Chairman Powell helped jawbone rate hike expectations

lower?

- In short, No. Reiterated prior sentiment from other Fed speakers, Cleveland

Fed President Loretta Mester said in the current session that "frequent White

House tweets don't affect Fed policy".

- According to popular rate hike probability models (Bloomberg, CME Group)

current rate hike probability for a fourth hike in December has receded from the

low 80s to the low 70s in the current session. 

- In comparison, MNI's OIS based PINCH model has been estimating lower chances

of a Dec hike in the low 60s this week, up from mid 50s last week.

- Jawboning not the reason. In actuality, moderating global and domestic data as

well as sharp re-pricing lower for global equities has models reflecting the

drop in probability. If continues, expect Fed to temper policy accordingly.