Pre-FED Market Update

This is an out-of-cycle update, but given the situation it is warranted. Today the FED will announce their plans for interest rate changes. Our models are showing an elevated risk of downside moves. As reported on Bloomberg this morning, the market is pricing in a 50% chance of a 50 basis point reduction. This gives us concern, because if they deliver a 25 basis point reduction (which is widely believed to be the practical solution) there could be a negative market reaction. Therefore, we have removed our leveraged positions. Our non-leveraged index positions are still in-place.