The Federal Reserve will likely cut rates by .25% on Wednesday, but the market is projecting it is a 50%/50% probability of .25% or .50%.

Dot Plot, if the projected Federal funds rate expectation for 2024 of 5.1% and 4.1% for 2025 does not drop very significantly we think a significant correction in the market will begin! We don’t view this as likely. The market is now looking for 3.5% on the Federal Funds rate for 2025. That is significant difference from the Fed’s Dot Plot in June.

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