Two hours to go.
The Federal Reserve, America's central bank, is widely expected to cut interest rates for the first time since December 2024. And for the moment, stocks are sort of wishy-washy.
The Russell 2000 (+0.90%) is rising, as a small-cap index might be, given that the members' borrowing costs were about to get pared down. The Dow industrials (+0.71%), in a totally different situation, are also rising. But the S&P 500 (-0.11%) and Nasdaq (-0.52%) are pulling back ahead of the event, which some analysts have warned is a "sell the news" situation.
That's because much of the market already expects a 0.25-percentage-point cut, bringing the benchmark Federal Funds Rate to a range of 4% to 4.25%. Investors see a slim chance of a bigger cut, perhaps half a point, but recent data reports seem to have ruled that out.
Wednesday Reading:.
What we don't know is where the Fed sees things going from here. As part of the afternoon announcement, we'll get a glimpse of their views with an updated Dot Plot. This report will tell us where various members of the central bank expect rates to land in future meetings, perhaps giving stocks a reason to turn up or down.
While bond investors have priced in as many as three rate cuts by year-end, Fed members might feel different, especially given the risks in the mixed economic data and the potential for sharper inflation.
So we wait. The highly anticipated release is due out at 2:30 p.m. EDT; a press conference with some added commentary about the decision will follow..
TurboTax Via TheStreet:
-- Noah Weidner, Markets Reporter
