Markets expect Fed to slash rates by 100 bps

Traders now expect the Fed to cut rates by 100 basis points at its March meeting, which would bring the federal funds target range to 0%-0.25% from 1.00%-1.25% currently.

The CME FedWatch Tool puts the probability of a 1 percentage point rate cut at 86.7% vs. 50.2% a day ago and 0% a week ago.

Bank stocks reflected that expectation in trading today, with the Financial Select Sector SPDR ETF (NYSEARCA:XLF) sinking 11%.

Wells Fargo (NYSE:WFC), off 16%; Morgan Stanley (NYSE:MS), down 15%; and Citigroup (NYSE:C), -15%, suffered the most damage among the U.S.-based megabanks.

https://seekingalpha.com/news/3551360-markets-expect-fed-to-slash-rates-100-bps