Listen: The question is not whether the Fed will cut rates but why
"The marketplace word of the day today is expectations expectations used in a sentence. It might sound like this, the Federal Reserve yesterday acted in accordance with expectations and signaled its willingness to cut interest rates the Fed's turned, although not unexpected was a big one from where the central Bank was just six months ago you might remember when it was raising rates. No, we're not talking about a huge cut here. Maybe a quarter of a percentage point. But as marketplace's Tracey Samuelson reports when you are trying to game out what a rate cut is gonna mean in this economy, it is all about expectations. Let's say the fed does shave a quarter of a percent off interest rates at its next meeting. Well, the biggest impact typically on lower rates would be on kind of interest sensitive sectors of the. Enemy housing autos. For example, thing is Tony Rodriguez. Head of fixed income strategy. For new Wien says that the market is already expecting lower rates from the fed, so some rates consumers and businesses pay already reflect that that positive impact is already in the market. So, you know, mortgage rates have come down. Financing rates have come down for you. Know durable equipment, autos, etc. So that cut on its own wouldn't make a huge difference for the economy. What makes a big difference for the economy is does that change expectations about where rates are going into Holland horse? Chief economist for Citi group says, if the fed is cutting rates in the relative near-term, the question is they cut more over the next few months, or next few years in cutting rates, the fed would be sending markets. And I got your back kind of a message that is ready to act if say the trade war starts really slowing economic growth, Carl Tannenbaum is chief economist at Northern Trust, but it's making the statement that the central Bank stands ready to support. Port the continuation of the expansion, and that symbolic message may actually be more powerful than the short room symbolism might be more powerful economically than the cut itself. I'm Tracey Samuelson for"