Will the Fed cut rates next week?

Currency strategists at dailyfx.com point out an interesting fact. Fed funds futures are now beginning to price in a slight chance of a rate cut as early as next week when the Fed meets and decides on interest rates. Futures are seeing a 14% chance of a 25 basis point rate cut up from 0% a week ago (see chart below). This constitutes a complete turn-around of expectations since a rate increase was priced into the fed funds futures market at the end of July. The Federal Reserve had declared inflation a concern and is therefore expected to keep interest rates unchanged for some time. In light of challenging developments in the financial services industry these expectations seemed to be revisited.
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source: US Dollar Down Over 2% vs British Pound as Markets Price In Fed Rate Cut Next Week Written by Terri Belkas, Currency Strategist, Friday, 12 September 2008 19:22:02 GMT http://www.dailyfx.com/story/market_alerts/fundamental_alert/US_Dollar_Down_Over_2__1221247469051.html