The few poor souls on Wall Street who have not decamped to the beach are having a happy August. Both the Dow Jones Industrial Average and the s&p 500 are inching back towards their earlier peaks. Investors are confident that the Federal Reserve will not raise interest rates when it meets on August 22nd. Nor, given the proximity to the presidential elections, do they expect interest rates to rise when the central bank meets again in October. A small, but growing, minority of exuberants even expects the Fed to put a formal end to its series of rate rises by shifting its policy tilt to "neutral" from its current "tightening" bias (see page 63).
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