By Heard Editors
The question is no longer when, or even if. Only, how much? That is enough to make the outcome of this week's Federal Reserve meeting one of the most uncertain in a long while.
An interest-rate cut seems all but assured. But will it be a quarter-point or half-point? The Wall Street Journal's Nick Timiraos says it will come down to "a finely balanced set of considerations."
On Tuesday, retail sales in August came in a bit better than anticipated, advancing 0.1% on a seasonally adjusted basis from July, contrary to predictions of a drop. Spending can be a driver of inflation, and a reason to go slower on rate cuts. But the central bank may be more focused on perking up the softening labor market.
The stock market didn't react much to that data point, apparently preferring just to wait for the Fed. The S&P 500 index barely moved for the second day in a row. The Nasdaq Composite, meanwhile, was up 0.2%. The blue-chip Dow Jones Industrial Average shed just 0.04%.
One thing the market does seem to expect is a jump in lending, fueled by cheaper borrowing rates. On Tuesday, shares of mortgage originator LoanDepot rallied 10% and online lender Upstart gained 7%. Credit-card and buy-now, pay-later lender Bread Financial rose 6%, and Synchrony Financial was up almost 4%.
This analysis comes from the Journal's Heard on the Street team. Subscribe to their free daily afternoon newsletter here_._
This item is part of a Wall Street Journal live coverage event. The full stream can be found by searching P/WSJL (WSJ Live Coverage).
(END) Dow Jones Newswires
September 18, 2024 03:32 ET (07:32 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
