As discussed in detail yesterday, the biggest question ahead of tomorrow's FOMC decision, is whether the Fed cuts 25bps or 50bps, and whereas just a few weeks ago it was conventional wisdom that a 50bps cut would signal that "something is broken", as the following cheat sheet of historical first rate cuts indicates...
... and would result in a negative reaction for risk assets, that narrative quietly flipped on its head in the past few weeks, and now not only is a 50bps is viewed as the base case, but the market hitting an all time high as it prices in 70% odds of a jumbo cut tomorrow.
