Stock markets on the rise ahead of crucial Fed interest rate decision

The stock markets were optimistic on Tuesday as investors eagerly awaited the interest rate decision from the U.S. Federal Reserve on Wednesday. Paul Gruenwald, Chief Economist at S&P Global Ratings, and Crit Thomas, Global Market Strategist at Touchstone Investments, provided insights during a conversation with Seana Smith and Madison Mills at Catalysts regarding their expectations for the upcoming Fed meeting and potential signs for future rate cuts. Gruenwald told Yahoo Finance that he expects a 25 basis points cut: "The data points to a soft landing... It's not just about the magnitude [of the cut] tomorrow, most of which is already priced in. It's about the path, how quickly the Fed proceeds and for how long." In contrast, Thomas stated that a 25 basis points cut would be "a small disappointment for the markets," as a 50 basis points cut had already been priced in. He added that this would be "like a small bump" and that one would continue from there. Gruenwald noted that it would be a notable achievement for the Fed to reduce inflation from 8 or 9% to 2% without triggering a recession and only minimally affecting growth. As long as the labor market remains stable, however, this seems to be the current course.