The odds of something even more aggressive, like a half-point move, grew quickly Friday.
With Federal Reserve Chair Jerome Powell all but confirming that an interest rate cut is imminent, the market's attention Friday quickly turned to when and by how much. Traders continued to price in a greater likelihood that the Fed will kick off what is expected to be a protracted easing campaign in September with a quarter percentage point, or 25 basis point, reduction.
That, among other vows to support the economy now that inflation has waned, provided some indication that a 50 basis point move is at least on the table. The Fed's benchmark borrowing rate, which influences a bulk of other rates that consumers pay, is now targeted in a range between 5.25%-5.5%. Markets expect the Fed to knock off a full percentage point this year and at least that much in 2025.
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