NewsBreak: Chances of Fed Rate Cut Now About 50/50

© Reuters.  © Reuters. – Many on are expecting the to cut its key federal funds rate by a quarter point on Wednesday. But’s is signaling the expectation may be misplaced. The Fed might not cut rates at all, which would shock many money managers and, possibly, slam stocks.

  • The tool puts the odds of cutting the key federal funds rate to 2% from 2.25% now at 48.5%. A day ago, the tool put the odds at 64.6% and 90% a week ago. The tool calculates the odds on the level of fed funds .
  • The odds of the Fed taking no action were 51.5%, compared with just 7.7% a week ago.
  • The change in sentiment may be due to rising interest rates over the last week, plus better data and a rally in stocks. The was at 1.805% on Tuesday, down slightly from Monday, but the yield was as low as 1.429% on Sept. 3, before closing at 1.4625%.
  • President Donald Trump has been calling for a big rate cut, perhaps down to 0%.
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