All eyes are fixed on the Federal Reserve this week. With inflation fading and the labor market showing signs of weakness, investors have been pricing in a string of market-juicing interest rate cuts, and the first is seemingly guaranteed to come after the Federal Open Market Committee (FOMC) meeting Wednesday.
As a result, Wall Street leaders are no longer debating if the Fed will cut rates, it’s all about by how much. Some argue that Fed officials will opt for a smaller 25 basis point rate cut, given the economy remains far from recession in most economists’ views. But others, including some Fed officials, have said that a 50 basis point rate cut is the best option to prevent the labor market from weakening further after years of elevated borrowing costs.
