A Fed letdown on rate cuts could be the stock market's biggest threat now

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In September, there’s a 68% chance the Fed will cut interest rates by 25 basis points and an 18% chance of a 50-basis point cut, steveliesman reports.

, Powell noted that conditions have changed since an FOMC meeting in early May, and policy may have to change as well. Powell had said in May that it was unlikely the Fed would adjust rates.

Should the Fed not move from the current stance, a full percentage point disappointment relative to market expectations would result in tightened financial conditions that could cost the stock market a 7% drop, according to Goldman Sachs estimates that also see a 0.8 percentage point increase in long-term bond yields, a 0.4 percentage point move higher in credit spreads and a 2% rise in the dollar.

Powell's comment in October that "we're a long way from neutral" rattled that dynamic, and a rate hike in December didn't help."Some of the more rational people on the Fed are saying we've got to keep all of our options open to us even if it means disturbing the markets," Booth said. "Therein lies the ultimate conundrum.

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 /  🏆 12. in DE
 

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steveliesman It’s amazing how much people put their decisions behind a bunch of forecasts that mostly are mostly just derived from herd-following. How many times does it take before we all learn that NO ONE HAS A CRYSTAL BALL. Humans = Fools.

steveliesman They shouldn’t cut rates at all. Crony capitalism already got a massive tax cut. They don’t need anything else.

steveliesman No worries, bye bye money, as the anti-Trump algos aka the fake sellers pile on yet again lol just another day of computerized organized crime on WS. Better luck next week.

steveliesman correction: there is ZERO% chance fed will cut rates by september as they have already stated that no action will be taken until after 2020 elections

steveliesman CHANCE.. CHANCE.. Percentages.. Total Nonsense🎲.. All Poll Trolling Hype The FederalReserve Watches this idiotic Media Speculation. There’s a 100% Chance of no Rate Cut. FED Is not a Gamble System It’s “America’s Financial Emissions Control Unit Of the Economic Engine”

steveliesman I hope they don’t go too far, too fast; keep some dry powder for when you really need it.

steveliesman Does a little short term rally do much for the real economy or is it just for traders to line their pockets? Seems like the world has gone mad! bitcoin up 2k in one day for a dam piece of code, more money printing coming soon. I’m sure humanity can think of a better way forward..

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Watch Fed Chair Jerome Powell speak live as market awaits hints on future rate cutsFederal Reserve Chairman Jerome Powell was scheduled to deliver a speech Tuesday at the Council on Foreign Relations in New York, followed by a question and answer session. The economy is booming per POTUS so obviously he needs to raise rates. 🙄🙄 What’s that? The economy is not booming, we need to cut rates.. 🙄🙄 So much misinformation from WhiteHouse Who knows?
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