"Investors have been anxiously waiting for September, and it's finally here. The Federal Reserve has been hinting for months that September is when it will start to cut interest rates, and betting markets are also convinced, with over 80% agreeing on a 25bps cut. The Fed has tacitly gauged public sentiment to guide its decisions, so the cut will likely happen."
"A terribly high inflation read on Thursday, September 11, is the only roadblock that could derail it. So far, analysts expect CPI to rise by 0.1% to ~2.8%, and the Fed should be able to digest such a rise and start cutting. Fed Chair Jerome Powell may balk if inflation unexpectedly soars beyond 3%. The core inflation rate is already at 3.1%, and this is a metric the Fed pays more attention to."
The Federal Reserve is likely to begin cutting interest rates in September, with betting markets assigning over an 80% chance of a 25 basis-point cut. A single high inflation reading on September 11 could derail the move, but analysts forecast CPI rising only modestly to about 2.8%. Core inflation at 3.1% remains a concern and could prompt caution. Political pressure for additional cuts may influence the decision. Dividend ETFs, particularly those with exposure to preferred and hybrid securities such as PFF, stand to gain if rate cuts materialize. PFF pays fixed dividends but has lagged amid a Treasury yield surge, contributing to a 13.7% five-year decline.
Read at 24/7 Wall St.
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