|
(CEP News) - In a day that saw market confidence crumble as the Dow Jones Industrial Average sank to its largest percentage decline since 1987, Fed funds futures are pricing in a 26% chance of 50bp rate cut by the Oct. 29 meeting.
Markets remain fully priced in for a minimum 25bp rate cut by the October meeting as the DJIA closed down 679 points to 8579. It was the twelfth worst day in the more than 100-year history of the Dow. For the Dec. 16 meeting, markets are pricing in an additional 25bp rate cut. The implied probability for a 50bp cut has remained unchanged at 35.3% from a day ago. Markets have now begun to price in a 5% chance of a 75bp cut, which would lower the Fed funds rate to 0.75%. Looking ahead to the Jan. 28, 2009 FOMC meeting, markets are pricing in a 97.2% chance of minimum 25bp rate cut. Markets are also factoring in a 37.4% chance of a 50bp cut and 6.7% chance of a 75bp cut, while leaving a 2.8% chance of no rate change. By Steve Stecyk,
This email address is being protected from spam bots, you need Javascript enabled to view it
CEP Newswires - CEP News © 2008. All Rights Reserved. www.economicnews.ca The Copying, Broadcast, Republication or Redistribution of CEP News Content is Expressly Prohibited Without the Prior Written Consent of CEP News. A copy of CEP News disclaimer can be found at http://www.economicnews.ca/cepnews/wire/disclaimer. |
