{"id":147508,"date":"2025-09-10T22:10:11","date_gmt":"2025-09-10T22:10:11","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/147508\/"},"modified":"2025-09-10T22:10:11","modified_gmt":"2025-09-10T22:10:11","slug":"why-not-50-inflation-data-has-traders-hoping-for-bigger-fed-rate-cut","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/147508\/","title":{"rendered":"\u2018Why not 50?\u2019 Inflation data has traders hoping for bigger Fed rate cut"},"content":{"rendered":"<p>Wall Street once again sees the possibility of a super-sized rate cut by the Federal Reserve next week. The producer price index unexpectedly fell 0.1% in August . Economists polled by Dow Jones expected a gain of 0.3%. Following the report, the chance of a 50 basis-point rate cut increased to 10.2% from 7% the day before, according to the CME Group&#8217;s FedWatch tool, which uses interest rate futures trading to create its odds. &#8220;This number now, if the Fed is truly data dependent, the question should be, &#8216;Why not 50?'&#8221; said Mohamed El-Erian, chief economic advisor at Allianz, on CNBC&#8217;s &#8221; Squawk Box .&#8221; &#8220;The employment side is much weaker than they expected &#8230; and now the latest inflation print is much better.&#8221; Stock futures got a bump after the release, with contracts tied to the S &amp; P 500 rising about 0.5%. To be sure, that move may seem small given the increased chance of a larger Fed rate cut. That&#8217;s because Wednesday&#8217;s market move is still driven primarily by Oracle \u2014 which issued blockbuster guidance that sent shares soaring more than 30%. ORCL 5D mountain ORCL 5-day chart On top of that, traders may not want to get ahead of themselves with the August consumer price index report due for release Thursday. &#8220;Overall, it was a softer round of inflation data but not sufficient by itself to start the conversation about a 50 bp Fed cut &#8212; for that, investors need to see a soft CPI tomorrow,&#8221; wrote Ian Lyngen, head of U.S. rates strategy at BMO. One thing is certain: The Fed will lower rates at its policy meeting next week. &#8220;Although tomorrow&#8217;s 12-month CPI is projected to come in at 2.9%, vs 2.7% for the prior month, we believe that the FOMC will prioritize recent labor market weakness and start a new rate-cutting cycle next Wednesday,&#8221; said Larry Tentarelli, chief technical strategist for Blue Chip Daily Trend Report. &#8220;What this means for investors: The S &amp; P 500 remains in a bullish uptrend \u2026 Our best &#8216;rate cut&#8217; ideas remain in homebuilders, small caps, banks and brokers and consumer finance.&#8221;<\/p>\n","protected":false},"excerpt":{"rendered":"Wall Street once again sees the possibility of a super-sized rate cut by the Federal Reserve next week.&hellip;\n","protected":false},"author":2,"featured_media":147509,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[28,122,64591,101,113,1052,114,21],"class_list":["post-147508","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-business-news","tag-cme-group-inc","tag-economy","tag-investment-strategy","tag-prices","tag-stock-markets","tag-united-states"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/147508","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=147508"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/147508\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/147509"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=147508"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=147508"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=147508"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}