ChainCatcher news, according to the schedule, the Federal Reserve will announce its interest rate decision and a summary of economic expectations at 2 o'clock next Thursday. Traders are pricing in almost equal odds of the Federal Reserve cutting interest rates by 25 basis points and 50 basis points next week. The changing bets reflect one of the key issues facing the market today: whether the Federal Reserve will stop the weakness of the labor market through aggressive rate cuts, or will it take a slower pace of rate cuts to stay on the sidelines.

Fed funds futures are pricing in more than two percentage points of rate cuts over the next 12 months, a scenario rarely seen outside of a recession. “With the S&P 500 near all-time highs and credit spreads narrow, starting a rate-cutting cycle with a big cut seems like something that only the Fed knows something that no one else does,” said James St. Aubin, chief investment officer at Ocean Park Asset Management, which manages $5.3 billion. “I think a 50 basis point cut is likely to do more harm than good in terms of market sentiment.”

Regardless, even if the Fed cuts rates by 25 basis points next week, that meeting could be seen as a dovish one, as long as Powell doesn’t oppose expectations of one or even two 50 basis point cuts in the final two meetings of the year.