Stagnant manufacturing’s effect on the economy has futures traders confident the Federal Reserve Board will cut interest rates at its meeting next week. The rate should drop another quarter-percent.
HousingWire reports, “CME’s FedWatch tool on Monday showed a 91% chance of a 25 basis point cut at the Oct. 29 and 30 meeting of the Federal Open Market Committee. Comments from Fed policymakers prior to entering the traditional pre-meeting quiet period indicated a bias toward a third consecutive cut.”
The story also says earlier this month, the ISM index showed September’s manufacturing activity at the most depressed level in more than a decade as the U.S.-China trade war weighed on the economy. That conflict between the world’s two largest economies was the overriding concern of Fed policymakers at the September meeting, according to minutes released Oct. 10.
“The U.S. economy confronts some evident risks in this the 11th year of economic expansion,” Fed Vice Chairman Richard Clarida said in a speech on Friday. “Business fixed investment has slowed notably since last year, exports are contracting on a year-over-year basis, and indicators of manufacturing activity are weakening.”
To learn more about a pending interest rate drop, click on the photo above.