Goldman: There's Still A Chance The Fed Fires Its Last Interest Rate Bullet Tomorrow

While the most likely outcome is that the Fed keeps its fed funds rate at 0.25%, while buying bonds to effectively ease monetary policy, Goldman’s fed funds model implies that there is still a decent chance (1 in 4, 27%) that the Fed just cuts rates right to zero. There’s still one bullet left in this old gun… even as all eyes focus on the new quantitative easing cannon.

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(Via Goldman Sachs, Fed Fund Probability Report, 29 October 2010)

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