mastery-money.com

The market is nervously expecting the next rate cut to come on September 18th. (Fed funds currently stand at 5.25%)The futures market has assigned it a probability of 172% that the fed will cut rates-with a lot of the market participants expecting a 50 basis point cut. The credit markets have remained under pressure for quite some time and they are looking for the Fed for relief. The credit markets have grown enormously over the last few years primarily through the use of leverage and the pains the market is feeling is due to the contraction of credit. The market is contracting for a healthy reason- there was too much free money out there. Why would the Fed go into the market and provide more liquidity- it would be like adding gasoline to the fire.