Daily Note | September 18, 2024 | It's Fed Day... Again.

Stocks are hovering not far from record highs this morning as everything is in a holding pattern until we get the Fed decision in a few hours. The decision comes out shortly after 2pm EST with the market 100% certain of a cut, just not the size.

Jeffrey Gundlach said yesterday that he thought the economy was in recession now and that the Fed would cut 50 bps. Yesterday, we received retail sales which came in ahead of expectations at +0.1% m/m and +2.1% y/y. This lowered the Atlanta Fed's GDPNow model to +2.5%.

Again, I don't think it matters all that much about the size of the first cut as the Fed is not predetermined, meaning that if the data deteriorates they can increase the size of the cuts.

JP Morgan's Scenario Analysis: