U.S. Interest Rate Futures Raise Odds Of May Rate Cut To 90% After Fed Decision Vs 80% Just Before
Portfolio Pulse from Benzinga Newsdesk
U.S. interest rate futures indicate a 90% chance of a rate cut in May following the Federal Reserve's latest decision, up from 80% just before the announcement, according to London Stock Exchange Group's Fedwatch tool.
December 13, 2023 | 7:07 pm
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POSITIVE IMPACT
The increased likelihood of a May rate cut as indicated by interest rate futures could lead to a positive short-term impact on SPY, as lower interest rates can boost economic activity and market sentiment.
SPY, which tracks the S&P 500, is sensitive to changes in interest rate expectations. A higher likelihood of a rate cut typically lowers the cost of borrowing, potentially stimulating investment and spending, which can have a positive effect on the stock market and the ETFs tracking it.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 70