What Wall Street Anticipates Ahead of Today’s Fed Decision

 Here’s what economists, investors, and analysts are saying as they await the Federal Reserve’s decision on whether to cut interest rates by a quarter-point or half-point:

Seema Shah, Chief Global Strategist at Principal Asset Management, noted, “The Fed may be questioning what it has to lose by cutting rates by 50 basis points—other than potentially setting a risky precedent for future rate cuts. However, it might also be concerned about disappointing the markets, as a quarter-point cut could provoke a negative reaction—creating a cycle where both the market and the Fed are challenging each other to lower rates further.”

John Lynch, Chief Investment Officer at Comerica Wealth Management, added, “While there is a consensus leaning towards a 50 basis point cut, we expect the Fed to opt for a 25 basis point reduction today. Inflation is still above the Fed’s target, the unemployment rate is around 4.0%, and federal deficit spending continues to rise.”

Torsten Slok, Chief Economist at Apollo Global Management, commented, “Even if the Fed starts an easing cycle, we believe interest rates will remain relatively higher for a longer period. Our base case is a soft landing, which supports our positive outlook on direct lending. We expect it will take more time for inflation to reach the central bank’s 2% target range.”

David Morrison, Senior Market Analyst at Trade Nation, said, “There is nothing indicating a hard landing or recession. The concern is that a 50 basis point cut could send the wrong message, potentially leading to a market selloff.”