The Fed has seen quite a few economic numbers since they last decided to reduce the federal funds rate target by 50 basis points on April 18. Indeed, the employment situation alone should guarantee that the Fed is likely to ease credit conditions further at their meeting on Tuesday. In addition to the deteriorating labor market, consumer spending remains soggy and productivity figures plunged. Inflationary pressures are not a concern at this point.
Market players are all over the board in terms of next week's Fed action. At this point, the best bet is that the Fed will reduce the funds rate target by 50 basis points. However, stay tuned, because the Fed has already surprised market players a couple of times this year.
Markets at a Glance Recap of US Markets The Economy The Bottom Line Looking Ahead
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