BUSINESS
03/28/2008 02:45 am ET Updated May 25, 2011

Another 3/4 Point Rate Cut Coming?

Forget a half-point cut. Wall Street is now speculating that the Federal Reserve will lower interest rates another three-quarters of a point next week.

The reason: the continued selloff in the stock market and a slide in bond yields, suggesting the Fed's work was far from over.

February fed funds futures now suggest an 81% chance that the Fed will cut its target for overnight rates to 2.75% from 3.5% at its policy-setting meeting on Jan. 30. The odds of a half-point cut rose to 122%.

Late Tuesday, the futures were pricing in a 90% chance of a half-point cut and a 60% chance of a three-quarter point cut next week.

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