The Fed Meets Today

After a weekend filled with US government and Wall Street deal making, a Monday opening that hit the stock market as hard as the 9/11 terrorist attacks, and a mortgage market continuing to crash the only certainty is that the Fed will not raise the target funds rate. Beyond that little is left to absolutes. The Fed is most likely to leave rates unchanged as inflation has begun to mute with oil prices descending below $100 per barrel. Likewise, the Fed is most probably holding back the opportunity to lower rates to give it room for later stimulus in case markets continue to tumble or stagnate. Although Fed futures are rapidly increasing the odds on a Fed rate cut. I feel that the Fed is likely to hold that option in check. Expect the Fed rate to remain at 2 percent.