Will she or won't she: Yellen's difficult choice

(14 September 2015) All eyes are on the Fed this week (yet again!) as investors wonder: will she or won't she?  Fed Chair Janet Yellen has been leaving a trail of fairly strong hints in recent months that an interest rate hike is coming sometime this year and possibly as soon as Thursday.  The Fed's policy statement will be released on Thursday at 2 p.m. as it reveals if the unprecedented six-year long zero interest rate policy is finally over.  Analysts and commentators are sharply divided on this question, although it seems that the consensus position is that she will leave it unchanged for a bit longer and raise it either in October or December. 

It's unclear what the market's reaction to a hike might be, although most believe it could spark some sort of decline.  That said, enough traders have already discounted the possible 25 basis point hike (yes, that's just 0.25% at the low end of the range) that any decline will be fairly orderly and perhaps even modest. 

So what does astrology have to say about the probability of a rate hike on Thursday?  The alignments I'm seeing do not look clearly one way or the other although I tend to think they lean towards an interest rate hike.  That is due in part to the prominence of Saturn in the current celestial geometry.  As I have noted for the past several months, September stood out as having significant Saturnian potential due to the exact 120 degree aspect between Ketu (South Lunar Node) and Saturn.  This is exact in the final week of September but is already effectively in aspect within one degree.  Saturn, of course, is the planet of pessimism and caution and hence it is associated with stock market declines. Saturn is also the planet of restraint and restriction so it may have a more natural affinity with tighter money, i.e. raising rates.

As a historical analogue, Saturn was also prominent back in 2004 when then Fed Chair raised rates for the first time in three years following the dot-com bubble collapse and 9/11 attacks in 2001.  On June 30, 2004 Greenspan hiked rates in what would become a three year long interest rate increase from 1% in 2004 to 6% by 2007.  At the time, Saturn (21 Gemini) was conjunct both Mercury and the Sun within a few degrees and aspected Jupiter (19 Leo) within two degrees. Saturn was also aligned with Neptune (21 Capricorn) in a 150 degree quincunx aspect.   That was also a strong Saturn-influenced pattern that may have reflected the tighter money policy that Greenspan announced that day.





While Saturn may incline collective actors towards a more cautious and fearful approach to the future, it is important to recognize that this could manifest in the Fed leaving the rate unchanged.   That is because the Fed could fear what might happen if they raised rates too soon, either in terms of a stock market crash or more economic slowdown in the US and abroad.  In that sense, this Saturnian energy could manifest in either scenario.  Obviously, this fails Popperian standards of theory falsification but it is worth noting all the same. 






Saturn is also highlighted this week because Mars is approaching its square aspect with Saturn this week and next (exact on 25th September) and those two malefic planets are usually difficult energies for investors.  So not only is Saturn connected with renunciatory Ketu, it is also linked with irascible Mars.  Those are difficult aspects to be sure.  As an added shot of Saturn, tropical Saturn enters Sagittarius on Friday just a day after the Fed statement.  The bottom line is I think that Saturn's correlation with declines is sufficiently well-established that a tightening and a subsequent sell-off is the most likely scenario although I would not be surprised if things play out differently because of that alternate interpretation. 

I should also note an intriguing third possibility here.  Mercury turns retrograde at 2.09 p.m. EDT, just nine minutes after the release of the statement.  Mercury retrograde is traditionally associated with situations of confusion and dysfunction so there could be something about this statement that causes the markets to flinch in some way.   Could the Fed raise rates while at the same time promising to launch another round of quantitative easing (QE)?  Or could the Fed announce a completely new policy instrument to boost the economy that the markets can't make quick sense of?  Or more simply: could the statement be delayed?  It's interesting to think about these sorts of scenarios given the Mercury retrograde proximity to the statement release.  Or it could be nothing much at all except perhaps the market reacting in a confused way to Yellen's usual panoply of reassuring platitudes that keep the game going a bit longer.  It will be an interesting week. 

I should think stocks are likely to remain a bit jittery before the statement since Mars enters sidereal Leo on Tuesday. 






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