Interest-Rate Cuts: Funds Rate and Re Planning

interest-rate cuts: I'm having a hard time figuring out why they're planning to cut, said Mark Stoeckle, CEO and senior portfolio manager at Adams Funds told Market Watch, adding that his conversations with management have left them cautiously optimistic about the trajectory of the economy as benchmark stock indexes hit all-time high, according to Market Watch. This is not the traditional environment one expects to trigger interest-rate cuts. Possibilities include a single 25 basis-point cut in the federal funds rate for the year at the next policy meeting in July, as well as a rare 50-basis point reduction later this month that kicks off several rounds of easing before the end of the year. Michael O'Rourke, chief market strategist at Jones Trading went as far as to call Powell's testimony surreal, in a recent note to clients. Read An economy gone mad ' The Fed is going to cut interest rates despite record stock prices, low unemployment Others say that a rate cut in such an environment is not as uncommon as one would think. Unemployment is below the Fed's maximum employment target, prices are as stable as they have ever been in the history of the country, and the yield on a 30-year Treasury yield is 50 basis points above its all-time low, he wrote, arguing that the Fed is clearly achieving its mandate of maximum unemployment in the context of price stability. (news.financializer.com). As reported in the news.