Fed-funds Futures Indicate Significant Rate Cut as Fed Decision Approaches
Market Forecasts on Rate Cuts
Traders in the federal-funds-futures market on Wednesday continued to expect a large interest-rate cut by the Federal Reserve ahead of its rate decision this afternoon.
Current Expectations for Rate Adjustments
Fed-funds futures showed a 63% chance the Fed will announce on Wednesday that it’s cutting its benchmark rate by a half percentage point, according to data from the CME FedWatch Tool, at last check. Traders saw a lower probability of 37% for a quarter-point cut.
Implications of Fed's Decision
The Fed, which currently holds its benchmark rate at a target range of 5.25% to 5.5%, will release its policy statement at 2 p.m. Eastern time on Wednesday.
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