The one thing no one expects

Brexit dramatically wrong-footed the market, and then the US Election did it all over again. On both occasions, consensus was on the wrong side of the trade. And now we have total consensus that the Fed will hike in December. So. What if consensus is wrong again? Not hiking would represent a big reversal of Fed guidance and would no doubt spook the market. Gold bulls would have a field day. But why would the Fed hold off? With Trump unexpectedly in, the Fed may want time to get clarity on his proposed fiscal policies to better co-ordinate monetary policy? But the 'why' is perhaps less important than just considering the possibility. Particularly given the market now prices a near 100% chance of a hike. The Bloomberg article below articulates why the market has formed its consensus view. But as pollsters, betting odds and market forecasts have demonstrated for us in recent months: it can pay in spades to trade the other side of the consensus view. (VIEW LINK)