Will the FED cut rates again at next week meeting?

[HighFlyer]

so, on Tue we got a "surprise" 75 bps cut. a lot of people think the FED will cut rates again at next week meeting. some think they will cut rates by another 75 bps, others expect a 50 bps cut or less. what do you think is gonna happen and how will the markets react? Have the markets already discounted an additional cut?

[milo]

I think we are in for another 50 bps cut. markets have already discounted that, though. any other opinions?

[aiki14]

Originally Posted by milo

I think we are in for another 50 bps cut. markets have already discounted that, though. any other opinions?

No, I actually have the exact same opinion. The FOMC could surprise with 25bps. 75bps would also be a surprise, but with this fed I would be stunned if they go out ahead of the curve and do the 75.

[rookie]

I remember reading somewhere that after the third short-term rate cut, markets usually tank pretty bad. anybody else knows this?

[ChaosTheory]

Originally Posted by rookie

I remember reading somewhere that after the third short-term rate cut, markets usually tank pretty bad. anybody else knows this?

Yes, it's called the Three Steps and a Stumble theory, mentioned in Stock Market Logic by Norman G. Fosback, a book every trader should have.

you can also read about it here

http://www.answers.com/topic/three-s...le?cat=biz-fin

good observation, by the way!