By Horizon Investments

BIG NUMBER

83% Probability of Fed Funds rate cut by July 31st.

(Click the chart below to view and download)

WHAT IT IS

The current estimate of the likelihood that the U.S. Federal Reserve will cut interest rates by July 31st, according to data compiled by Bloomberg.

MARKET/POLICY NOTES

Markets were generally quiet in spite of a flare-up in the Middle East and massive protests in Hong Kong. There was little new on the trade front. Volatility was muted. Oil prices declined on demand concerns. Consumer spending rebounded.

HOW MARKETS REACTED

U.S. equities (S&P 500) were up +0.6% on the week, slightly ahead of emerging markets and international. Treasuries were basically unchanged; high yield spreads tightened. The market was anticipating a rate cut, but we think the Fed may wait for more definitive data on a slowdown.

WHAT THIS MEANS

We remain in an interest rate-driven market, as economic data remains mixed and investors waited on news out of this Wednesday’s Federal Reserve meeting. Event risk concerns (the Middle East, trade) remain high on investors’ radar.

Horizon Investments is a participant in the ETF Strategist Channel.

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