US rate cut imminent

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Just a quick note to share a graph showing the US Fed funds target rate (red line), together with the actual  effective rate (blue line). In my opinion, it will not come as a surprise to see the FOMC reducing rates by between 50 and 75 basis points very soon, possible still today. (The next scheduled FOMC meeting is on October 28 and 29.)

fri-1.jpg

Source: Plexus Asset Management (based on data from I-Net Bridge)

It looks like another rough day, with the Japanese Nikkei 225 Average down by 9.6%, European markets down by between 6% and 8% and the Dow Jones Industrial Average future down by more than 6% at the time of writing.

We’re not through the rough patch yet. White knuckles and shaky knees …

 

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2 comments to US rate cut imminent

  • talk of large put seller in S&P this am, when can the mkts be up 2 days in a row?, its been a month. hedge funds cause of this weeks late fallout, time to buy post payroll data

  • Frank Wordick

    Looks to me as if the Fed is pushing on a string. What this will do is expand the TED spread with LIBOR. Do you think that will be an improvement? It doesn’t look to me as if interest rates are the problem. It has been proven that investors will sell stocks and buy Treasuries even at zero interest rates.

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