Fed Chair Powell Makes Announcement Today

STOCK INDEX FUTURES

Stock index futures are lower as it appears more likely that the Federal Open Market Committee will reduce its fed funds rate by only 25 basis points at its November policy meeting. Last week there was an over 50% chance that the FOMC would reduce its fed funds rate by another 50 basis points.

The 8:45 central time September Chicago PMI is expected to be 46.0, and the 9:30 September Dallas Federal Reserve manufacturing survey is anticipated to be -10.0.

At 12:00 central time Federal Reserve Chair Jerome Powell will speak on the economic outlook before the National Association for Business Economics 66th Annual Meeting.

Stock index futures have recently performed better than the news would suggest, which should be viewed as a sign of strength.

CURRENCY FUTURES

The U.S. dollar index is higher.

German import prices increased 0.2% year-over-year in August, which is much slower than the 0.9% gain in July. This was the smallest increase since May.

The U.K. economy grew more slowly than previously believed in the second quarter. Economic output expanded 0.5% in the April-to-June period. This reading was slightly weaker than a preliminary estimate of 0.6% growth in gross domestic product. Economists expected a 0.6% increase.

Japan’s factory output declined 3.3% in August from the previous month, which was worse than a median market forecast of a 0.9% drop.

INTEREST RATE MARKET FUTURES

It is widely expected that the Federal Open Market Committee will reduce its key interest rate again at its November meeting.

Futures are lower as expectations shift to the FOMC cutting its fed fund rate by only 25 basis points next month.

Currently there is a 60% probability that the FOMC will lower its fed funds rate by 25 basis points at its November 7 policy meeting, and there is a 40% chance that the FOMC will reduce its key rate by 50 basis points.

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