Reuters is reporting that U.S. short-term interest rate futures rose strongly on Sunday after the Fed announced their “emergency measures”.
As a result, the chances of the Fed lowering the federal funds rate by 100 basis points at or before Tuesday’s policy meeting is now at 84%.
A 125 basis point cut is now pegged at 25%.
A 100 basis point reduction would push the feds rate to 2.0 percent from 3.0 percent, the lowest since December 2004.
If you have cash and great credit, get ready to buy your dream home 12 months from now.
UPDATE:
10:52 AM EST (Monday) – A 100 basis point cut is now pegged at 94%
Regards,
George
Great post George. I guess we’ll find out on Tuesday exactly what the rate cut will be. Looking at the US economy its painfully evident that businesses are shedding jobs, wall Street is convulsing, energy prices are skyrocketing and people are reluctant to spend their money. In my opinion, the fed’s key rate will head even lower, probably to 2 percent or even lower by the spring or early summer.