He Said, She Said

On Monday afternoon, Jean Boivin, head of BlackRockCRM (BLK) Investment Institute said, "Markets have been quick to price in rate cuts after the Fed finished its fastest hikes since the 1980's - and price them out when inflation spooked to the upside. As the Fed readies to start cutting, markets are pricing in cuts as deep as those in past recessions. We think such expectations are overdone."

Elsewhere, JP Morgan (JPM) head of global research Joyce Chang stated, "We're still sticking with the 50-basis point call (for Wednesday)." Chang sees potential recession risk for later in 2025 but added that this risk is "not imminent right now." For that reason, Chang said, "The Fed's tone, no matter what, I think is going to be relatively dovish."

Fed Funds futures trading in Chicago are currently pricing in a 67% probability for a reduction of 50-basis points to be made to the Fed's target range for their short-term benchmark rate tomorrow afternoon and a 33% chance for a 25-basis point cut. This market is still pricing in a 64% likelihood for 125