Rate Hikes vs. Rate Cuts

“Expect the FOMC to raise rates sooner than expected - the December 11, 2007 meeting at the latest.” -- Weekly Forecast Stockmarket entry for Thursday, June 28, 2007 posted 6/23/07.

And the economists at JPMorgan Securities seem to agree, according to the July 30, 2007 Barron’s (“Where the Bond Buys Are”). In an interview with Chief Credit Strategist Edward Marrinan, he states that “the house view is that we will see a hike in December that will lift the fed-funds rate to 5.50%, possibly followed, if necessary, by two more 25-basis-point moves to a peak of 6%, maybe by the end of next year’s first quarter.”

Now about those Fed Funds Futures that as of Friday, July 27 were 100% priced in for a rate cut

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