The 'Fed Funds Futures' is showing there's a 167.5% chance of a 0.25% Fed rate cut tomorrow. But let's break that down...
This is what market analysts, strategists, and investment managers look at to see what 'the market' expects the Fed to do. The 'Fed Funds Futures' data is now showing there's a 167.5% chance of a 0.25% Fed rate cut tomorrow. But let's break that down...
This also means markets have fully priced in (with a 100% probability) that the Fed will cut rates by 0.25%. But there's also a 67.5% chance the Fed will cut rates by 0.50%. It will be the first cut since 2020. But it's not the be-all and end-
Also consider 1- Markets are forward-looking and are expecting Fed rate cuts of 1% (from November to March). 2- Rate cuts/moves can lag 4-29 months (Fed Reserve Bank of St Louis). 3- So if the Fed plots further cuts, it will be positive for for risk on assets
For more, refer to the Federal Reserve of St Louis' website on how varied the lags are for rates to be 'felt' by the economy and market
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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151453268 witso : Hi jess, interesting to note lag is the Reason why a true economist who could recognise an overheated economy should act with pre-emptive interest rate moves to stop us falling off a cliff. They Have one job…. One job and they blew it , and Mrs Bullock is going to blow it again if shes not careful.
103370157 : I think it should be 0.25,%.. slow and steady