RJO FuturesCast

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Interest Rates

Fed Expected to Cut Interest Rates by .25%

Posted 10/30/2019 10:12AM CT | Greg Perlin

Today is a big day for both the treasury and stock markets as the Fed is widely expected to cut rates by ¼ point. The announcement comes at 1:00pm central with Powell’s press conference at 1:30pm. Noteworthy news already out today is the GDP number, which came out at 1.9% while the street was looking for 1.6%, so it was a beat. However, the GDP was still below 2% so the news wasn’t all that bad although it beat the lowball number at 1.6%. In addition to the GDP report, we also saw ADP which came out near expectations around 125k.  

About 30 minutes ago, the Chilean President Pinera announced that he was cancelling the APEC summit schedule in Santiago next month. This is important because that is where the U.S. and China had planned to sign “Phase 1” of the trade deal.  Going back to today’s major news, the market has already priced in the expected .25% cut today which should be no surprise, but what is of major importance is what Powell says in his press conference. Traders will key on any change in language and will pay extra attention whether he comes out as hawkish or dovish and the trade will dictate as such. On Friday we see monthly payrolls. The street is expecting 85k vs last month 136K gain.

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Greg Perlin

Senior Market Strategist
Greg is a former Chicago Board of Trade member. He was an independent floor trader, pit broker and floor broker with Cantor Fitzgerald. Some of his clients included traders from Morgan Stanley and Lehman Brothers. He also acted in the capacity of desk manager for the morning trade desk. Greg was part of the elite Lind Plus Division for 10 years before joining RJO Futures in 2011.
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