The Fed is expected to cut rates

Investors expect the Federal Reserve to cut interest rates by a quarter-point later Wednesday. Many will focus this afternoon on what Chairman Jerome Powell signals about cuts to follow.

Traders are betting on two more quarter-point cuts, in October and December. Hope that the central bank will further lower borrowing costs to bolster the labor market has contributed to a run of US stock records. Stocks were mixed Wednesday morning.

Drama over the Fed’s makeup dominated the run up to the meeting. Democrats introduced a Senate bill Tuesday aimed at drawing a firmer line between the White House and the Fed after Trump adviser Stephen Miran was sworn in as a governor.

An appeals court upheld an injunction allowing governor Lisa Cook to attend while the administration tries to oust her. The question of who will succeed Powell in May remains open and may factor into the market interpretation of any policy signals that emerge Wednesday.

President Trump and Chairman Powell have had their disagreements in the past, and it is believed that Trump will try to ensure that the new Chairman of the Federal Reserve is more receptive to his wishes.

The S&P and NASDAQ edged a bit lower today, while the Dow industrials rose. It is unlikely that today’s interest rate cut announcements had much effect on them.