📈 Rate Cuts?

Where are we going to land on interest rates?

Interest Rate Decision Coming

One of the biggest economic events that we have coming up is FOMC where the Fed will make their decision on interest rates.

This meeting happens on Wednesday next week (September 18th).

We are expecting rate cuts at this point based on the state of the economy as well as recent remarks that Powell has made.

This is what the markets are expecting to see from a percentage probability standpoint:

With current rates at 525-550, you can see that the expectation is for rates to drop by a quarter of a percent at this meeting to 500-525.

However there is roughly a 30% chance that we see a 0.5% drop in rates to 475-500.

With this in mind, the market should respond positively to either result, with the 0.25% drop being likely priced in. If we were to see the 0.5% shift, we could see volatility in the market as this would not be expected.

I walk through expectations for this meeting and how I am trading it in the video below: