Fed's "Damned If They Do, Damned If They Don't" Decision Day
The Federal Reserve is staring down an absolutely pivotal decision for financial markets this Wednesday. Will it take a hawkish "inflation fighter" stance and stick to a modest 25 basis point rate cut? Or embrace a more dovish "growth supportive" approach with a 50+ basis point strike to get ahead of deteriorating economic conditions?
Sponsor
Buy This Top Tech Stock BEFORE Its Price Moves Higher
Claim Your FREE Report on the Top Tech Stock to Buy & Hold Now! Full Story >>
Economists broadly expect the hawkish 25 basis point script (84% in the latest CNBC survey). But futures are pricing a 61% chance of that bigger dovish 50+ basis point move that traders want to see. Meanwhile, some experts warn anything less risks putting the recovery in jeopardy.
It's a make-or-break verdict for the Fed. The aftermath is liable to dictate the near-term market trajectory through year-end. Sticking to 25 basis points could overtighten financial conditions versus dovish repricing, catalyzing a major selloff. But a dovish downshift raises credibility issues after projecting higher terminal rates.
Circle Sept. 20 - the Fed's fateful call could unleash a massive relief rally or a searing retrenchment across all asset classes.
