The Federal Reserve Board meets today to consider whether to raise interest rates, leave them where they are, or lower them once again. Iowa stockbroker Steve DeVenney says the market’s already expecting an announcement that they’ll be cut, and more important than the rate change could be the committee’s wording on why they took this year’s seventh rate cut. Though the stock market is expecting another rate cut from the federal reserve board, it’s not likely to sag even if that doesn’t happen, says DeVenney. He says if they announce rates will be unchanged and say the worst is over, the market will perceive that as good news. What might worry money managers is if the fed cuts rates by fifty basis points, a full half-percent from three and three-quarters to three and one-quarter percent on overnight fed funds, something that might make Wall Street wonder what the fed knows about the need to aid recovery.This would be the seventh time this year the federal reserve board has lowered interest rates, a move that typically takes half a year or more to have an effect on the economy.He says it’s only August, seven months after the first cut of the year, so this may be the last one they have to make.
