A larger Fed cut wouldn't spark worry — but a smaller one might: Morning Brief

Published On Sep 17, 2024, 6:00 AM

The article discusses the Federal Reserve's upcoming decision on interest rates, focusing on the debate between a larger cut of 50 basis points versus a smaller cut of 25 basis points. Analysts suggest that a larger cut would not provoke market panic as it is already anticipated, while a smaller cut could have negative implications, such as tightening financial conditions and impacting economic growth. Economists from various firms point out that a 25 basis point cut could lead markets to reassess rates upward, negatively affecting consumer spending and sentiment. Goldman Sachs presents a bullish outlook for the S&P 500, predicting it could reach 6,000 in the next year, contingent on sustained economic growth driven by the Fed's actions.