Key Points
- In the market’s eyes, the Fed finds itself either poised to head off recession or doomed to repeat the mistakes of its recent past.
- “No recession today, but one is increasingly inevitable by year-end if the Fed fails to act,” said Steve Blitz, chief U.S. economist at TS Lombard.
- Traders are pricing in a half-point September cut, followed by aggressive easing that could lop 2.25 percentage points off the Fed’s short-term borrowing rate by the end of next year.
