It’s also a sign of confidence from Fed officials that inflation has come under control just enough to comfortably dial back policy.
Typically, in the lead-up to a Fed policy decision, Wall Street and economists are in alignment on what to expect.
But investors’ wagers for a half-point cut ramped up on Monday; and as of Tuesday afternoon, federal funds futures contracts were pricing in a 63% chance of a jumbo rate cut, up from around 30% on Thursday, according to the CME Group.
As inflation skyrocketed in 2021 and 2022, American employers pumped out jobs and the unemployment rate declined to half-century lows.
The Fed eventually responded to the country’s inflation problem with its bitter medicine of high interest rates.
Persons:
It’s, Christopher Waller, Elizabeth Warren, Robert Kaplan, Bill Dudley, ”, Powell, ” Gregory Daco, “, ” Julia Hermann
Organizations:
Washington CNN, Federal Reserve, Street, CME, Fed, Democratic, Dallas Fed, CNBC, Former New York, Bloomberg, Dow, Labor, New York Life Investments, CNN