Bets Are In, But the Fed’s Still Running the Casino
If expectations are met at 50 basis points, the pressure will pile on for even bigger cuts. Powell has reason to call the market’s bluff
Let it spin.
Photographer: Jerome Favre/Bloomberg
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There’s a widespread perception that Wall Street is nothing more than a casino. As Wednesday’s Federal Open Market Committee meeting approaches, with the choice on how much to cut the fed funds rate widely described as a “coin-flip” or a “50-50 shot,” this is perhaps understandable. Ultimately, the data give ample support to either 25 basis points or 50 basis points. Investing ahead of an FOMC decision hasn’t been this much like picking between black and red on a roulette wheel in a generation.