The Federal Reserve is widely expected to cut interest rates today, starting the long, slow descent from a post-pandemic stance of dampening a hot economy that is now showing signs of cooling.
Sophisticated investors are putting 96% odds on a 0.25 percentage-point cut to benchmark interest rates.
Lower borrowing costs don’t immediately translate into pocketbook savings for American households, whose credit scores are falling at the fastest rate since the 2009 recession.
They will, however, likely fuel stocks higher, especially riskier ones promising big artificial intelligence gains. “I wouldn’t want to be short tech going into this,” Adrian Helfert, chief investment officer of $18 billion Westwood Management, told Semafor.
However the market reacts, today’s Fed meeting takes place during unprecedented political pressure on the central bank and a fraying consensus that Chair Jerome Powell worked hard to keep together.