Rupar: the Dow is crashing close to another all time high today, and rate cuts are coming next week

[progree]

29. A 0.5% rate cut is very much on the table, all of a sudden

At the moment, the FedWatch tool says a 49% chance of a 0.50% rate cut and a 51% chance of a 0.25% rate cut
https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html

Stock market today: Stocks rise with jumbo Fed cut back on the table, Yahoo Finance, 9/13/24
https://finance.yahoo.com/news/live/stock-market-today-stocks-rise-with-jumbo-fed-cut-back-on-the-table-133138258.html

The odds of a 0.5% reduction jumped amid reports by the Financial Times and The Wall Street Journal that the size of the Fed's Sept. 18 decision will be a close call. Adding to the debate, influential former New York Fed president Bill Dudley said there's a "strong case" for a deeper cut.

The yield on the benchmark 10-year Treasury (^TNX) slipped Friday, down 2 basis points at around 3.66%. At the same time, the yield on 2-year notes, seen as sensitive to monetary policy, dropped to just above 3.58%.

As you say, they definitely look at more than the CPI. The PCE inflation index (PCE) is their favorite inflation indicator, particularly the core numbers

Latest inflation numbers and graphs:
https://www.democraticunderground.com/?com=view_post&forum=1014&pid=3305495
(notice in the short time since that was posted, the sentiment shifed to a roughly 50% and 50% chance of a quarter or half percentage point rate cut respectively).

They also look at the jobs reports and other economic indicators, as their dual mandate includes maximizing employment https://www.federalreserve.gov/monetarypolicy/monetary-policy-what-are-its-goals-how-does-it-work.htm
 
Aside: my new bonds and interest rates page https://www.democraticunderground.com/111698737#post4