Today, markets couldn’t look more different.
Trading is pretty much on hold today as investors wait for U.S. Federal Reserve Chairman Jerome Powell to announce that he will, as expected, deliver a 0.25% cut to interest rates, bringing them down to the 3.75% level.
Powell had better deliver: 99.9% of betters on Fed Funds futures have priced in the cut already, according to CME FedWatch. This is “the Fed put,” according to Goldman Sachs.
“After the ‘Liberation Day’ sell-off, markets shifted towards a Goldilocks regime based on less pessimistic growth expectations helped by a resilient corporate sector and more dovish Fed expectations due to a weak U.S. labour market. However, since October the Goldilocks regime has been ‘tested,’” due to declining risk appetite, Christian Mueller-Glissmann and his team told clients this morning. “Earlier this month, markets shifted more towards a ‘central bank put’ regime.”
Whatever he says will likely move the market.
Here’s a snapshot of the markets ahead of the opening bell in New York this morning:
