Investing.com – Many on Wall Street are expecting the Federal Reserve to cut its key federal funds rate by a quarter point on Wednesday. But Investing.com’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 futures.
- 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 economic 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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