With the spotlight on officials’ guidance for next year, the markets may be in for a rude awakening
- Another 25-basis-point Fed rate cut is almost certain at this week’s FOMC meeting.
- Markets are interested in what policymakers envision for next year.
- Stocks are at risk, bonds may bounce as the U.S. dollar falls on Fed gradualism.
All eyes are on the Federal Reserve and its Chair Jerome Powell for the U.S. central bank’s last meeting of 2024. The announcement of another interest rate cut seems a foregone conclusion. This puts the spotlight on officials’ guidance for what will come next year. On that score, the markets may be in for a rude awakening.
Fed Funds interest rate futures price in the probability of a 25-basis-point (bps) interest rate cut at this gathering of the policy-steering Federal Open Market Committee (FOMC) at a commanding 95.4%. That means the move has…
