A 75 bps rate cut is now priced in for the 18 March policy meeting
If the Fed delivers on those expectations, that will put rates back to the 0.25-0.50% range - which brings us one step closer back to the 0.00-0.25% range that was adopted back in December 2008 in response to the global financial crisis.
And that final step is more or less priced in for the July meeting as of now.
Quite frankly, it's absurd to even think that they will cut rates so drastically - even if it is just an emergency response - as the full scale of the situation is still yet to be quantified.
Then again, I'm sure if you said ten to fifteen years ago that the market can bully the Fed into five whole years worth of policy decisions, people would've called you crazy.
But that is sadly the reality of the current situation. So, the question this time around is with the market kicking and screaming now, will the Fed come to pacify it again?
If we see stocks start hitting circuit breakers and fall by 7% or even 13% over the next few days, who is to say that another emergency rate cut would not come?
