Oops, now a half-point Fed rate cut is likely again

Illustrating how volatile the market sentiment about the economy is, at this moment, February fed funds futures are priced at 96.9350 which corresponds to an implied fed funds target rate of 3.0650%, which implies a 100% chance of the Federal Reserve cutting the target rate by at least a quarter-point by the end of the month and a 74% chance of an additional quarter-point cut on top of that. In other words, a half-point cut is once again likely.

Fed funds futures are typically fairly reliable within 45 days of an FOMC meeting.The net here is that "the market" is predicting that the Federal Reserve will cut by a half-point at the FOMC meeting next week.

The most profound wisdom I can offer is that all of this is subject to change at a moment's notice, as we have seen this morning.

-- Jack Krupansky