Folly of forecasts before FOMC

Markets are never wrong, opinions are.
-Jesse Livermore

"Forecasts may tell you a great deal about the forecaster; they tell you nothing about the future..."
-Warren Buffet

"The only value of forecasters is to make fortune-tellers look good... I continue to believe that short-term market forecasts are poison and should be kept locked up in a safe place, away from children and also from grown-ups who behave in the market like children."
-Warren Buffet

"It's a racket. Those stock market guys are crooked."
-Al Capone

With the FOMC committee meeting this week, we may finally have the answer to whether the Fed will raise rates. It may come, then again it may be delayed. While many have said this increase has been telegraphed, it is not clear whether investors have heard the message or know what is the right message. Given the difference of opinions there will be movement after the announcement, that may be the only given. We will then move forward and focus on a new event that consume our time. 

Given the likely size (25 bps) and the fact no excess reserves will be drained, the market react will not be clear. Reserves will not be reduced as much as frozen by being held at the Fed at the IOER rate. The actual rate increase will be somewhere between the IOER and the reverse repo rate. It will be a channel controlled by the Fed. 

At this time, the folly of forecasts is still present. Markets are discounting a different event from economists and fed officials have given conflicting signals. There is no clarity and the market will behave accordingly.