"The Cut Was Front Run": Some Traders Suspect Fed-Rate Tip-off

[handmade34]

https://www.vanityfair.com/news/2020/03/some-traders-suspect-fed-rate-tip-off

...As Powell spoke on Friday afternoon, the Dow Jones average shot up about 300 points, and the CME traders who’d bought in advance made impressive profits, at least on paper—a fact that raised eyebrows of other observers of the markets. Marc Cohodes, a well-known market short seller, tweeted Tuesday that “The Cut”—the Fed’s 50-basis-point rate cut— “was front run”—meaning that some people seemed to be trading with advanced knowledge that it was coming—“late Friday and all day yesterday.” A longtime CME trader wondered who might have known in advance about Powell’s surprise Friday afternoon statement when the market was down 1,000 points.

This kind of good fortune in a tiny slice of the futures market has been a surprisingly regular feature of market-moving pronouncements in and around the Trump administration. It’s worth finding out why this is. But the people who could tell us what’s really going on with this sensitive information—for instance, executives at the CME or regulators at the Securities and Exchange Commission and at the Commodity Futures Trading Commission—and who is behind these successful trades, either aren’t talking or have dismissed the notion that the E-mini market might be rigged for some investors. It’s the sort of thing that keeps some CME traders up at night. “Early knowledge of a bullish announcement sure would give some people nefarious thoughts,” one longtime CME trader wrote me. “And especially if they could not be caught…. Wouldn’t it be nice to know tomorrow’s newspaper today? Or how about this afternoon’s news this morning, when the market is down 1,000 points?”

[lapfog_1]

1. Larry Kudlow giving some of his buddies a heads up?

wouldn't surprise me at all...

Even Trump might have been informed before the announcement.

[empedocles]

2. Almost a 'given' with trump and trumpers. Question is what do they do about it.

[handmade34]

3. my same reaction

"Almost a 'given'"

never thought I would become so cynical

[empedocles]

4. These people have clout, ala bad Santelli and the tea party - and their money is at stake

[beachbumbob]

5. heads up? Absolutely, but in the end, its gonna suck big for them

[Baitball Blogger]

6. You think so?

Do we yet know who benefited from airline stocks prior to 9/11?

[beachbumbob]

7. nope, never will but if this virus goes as bad as it could go, the loss of capital will be huge and

not likely to come back for decades

[czarjak]

8. "If you ain't cheatin', you ain't tryin'!"