The Dow Jones (DJIA) is now less than 1% away from surpassing its all-time high of 45,073.68 as the odds for rate cuts race higher following comments from Treasury Secretary Scott Bessent. Rate cuts can provide a helping hand to the stock market by lowering the cost to borrow for companies and individuals. However, rate cuts don’t guarantee better stock performance.
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“I think we could go into a series of rate cuts here, starting with a 50 basis point rate cut in September,” Bessent said in an interview with Bloomberg on Wednesday. “If you look at any model,” it implies that “we should probably be 150, 175 basis points lower,” added Bessent.
Odds of a September 25 Bps Rate Cut Hit 99.9%
The odds of a 25 bps rate cut at the September 16-17 Federal Open Market Committee (FOMC) meeting are now at an all-time high of 99.9%, up from 93.9% yesterday and 94.6% a week ago.
In addition, there is now a 58.7% chance of three rate cuts by the end of the year, up from 50.3% yesterday and 54.0% a week ago.
The Dow Jones is up by 0.87% at the time of writing.
