We are nearing critical mass for the USD and indices. With just under 28 hours to go until the FED shakes up the news cycle, it is time to prepare for the coming volatility. So far in the U.S. session, the DJIA and S&P are up moderately, pushing historic highs. That is a bold move ahead of a potential rate hike. It looks like investors are betting on the status quo.

U.S. Home Builders Were Busy In August

Today has brought us a few housing metrics and a bunch of speculation facing tomorrow’s events. The consensus among analysts is for the FED to keep rates at a static 1.25%. That is an interesting shift in sentiment, as last month at this time a rate hike was a foregone conclusion.

Today’s Numbers

The housing data reports are the most important numbers out this morning:

Event                                                    Previous               Projected           Actual

Building Permits (MoM, Aug)                 1.230M                   1.220M              1.300M

Housing Starts (MoM, Aug)                    1.190M                   1.175M              1.180M

Both stats are positive moves towards growth for the U.S. construction industry. More permits and starts show security in the short-term debt models of developers. If they were skittish about interest rates skyrocketing towards the end of 2017, then starts going into the North American Fall season would suffer.

Overview: Who really knows what the FED is going to do tomorrow? To be honest, I am surprised that the industry consensus is for rates to remain at a static 1.25%. This view sets the markets up for a big surprise during tomorrow’s U.S. session.

Markets are not fond of surprises. In the event that there is a rate hike, aggressive risk management and a solid gameplan will be absolute musts to weather the storm.

It is my opinion that we have a good chance of seeing the FED do the unexpected tomorrow.