The market is priced for 88% odds of a 100-basis-point cut in the funds
rate at today's FOMC meeting, down from 100% odds on Monday, when the
market was also priced for about 20% odds of 125 basis points in cuts.
For the April 30 FOMC meeting, the market is priced for 100% odds of a
cumulative 125 basis points in cuts, and 22% odds of 150 basis points in
cumulative cuts, down from 64% odds Monday.
For the June 25 FOMC meeting, the market is priced for 100% odds of a
cumulative 125 basis points in cuts and 78% odds of a cumulative 150
basis points in cuts (a 1.50% funds rate), down from 100% odds Monday, when the market was also priced for 18% odds of a cumulative 175 basis points in cuts.
For the end of 2008, the market is priced for a 1.53% funds rate, up
from 1.43% Monday.
P.S. Will you be there when Cramer makes his next move?
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Tony Crescenzi Blog The Capitulation Bottom 3/17/2008 11:00 AM EDT As bad as things have gotten, there is light at the end of the tunnel.
Tony Crescenzi Blog $10 Trillion of New Credit 3/14/2008 4:04 PM EDT Money growth could be a cure for our credit problems.
Tony Crescenzi Blog Rate-Cut Odds Zoom 3/17/2008 12:52 PM EDT The markets are looking for more than 125 basis points by the end of the year.
Tony Crescenzi is the chief bond market strategist at Miller Tabak + Co., LLC, and advises many of the nation's top institutional investors on issues related to the bond market, the economy and other macro-related issues. At the request of the Federal Reserve, Crescenzi is a regular participant in the board's Livingston Survey of economic forecasters. He is also the author of the revised investment classic, The Money Market,
first published in 1978 by Marcia Stigum, and The Strategic Bond Investor. At the time of publication, Crescenzi or Miller Tabak had no positions in the securities mentioned in this column, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Crescenzi also is the founder of Bondtalk.com, a popular Web site covering the bond market and the economy. Crescenzi appreciates your feedback; click here to send him an email.
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