Saturday 19 January 2008

Fed rate cut: Another peep at 100 bp

I mentioned the possibility of a 100-bp cut in the fed funds rate by end-January on Tuesday. Well, according to traders, such a cut has just gotten a bit closer to reality. From Calculated Risk:

According to the Cleveland Fed, the market expects a 75 bps cut in the Fed Funds rate on January 31st, with the odds of a 100bps rate cut rising rapidly.

However, Tim Duy thinks the odds favour 50 bp.

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