But, as Deutsche Bank's Jim Reid notes, exactly what happens today is far from a foregone conclusion, as the question still on investors' minds is by how much the Fed will cut, and whether there'll be any messages about the future path of rates going forward. The market currently fully prices a 25bp cut and implies an 16% chance of a larger 50bp cut. And as we discussed last night, although the Fed have given no real encouragement to the notion of a 50bps cut it's worth noting that the last time the Fed began a series of rate cuts, in September 2007, their opening move was a 50bp cut (with a recession following three months later), and a similar 50bp cut happened when the Fed began cutting in January 2001 (a recession followed in March).

Of course, rates were higher back then though so the Fed had much more space before hitting the infamous zero lower bound. The last time the Fed started an easing cycle with a 25bps "insurance" cut was in September 1998, when they ultimately cut rates 3 times and successfully prolonged the expansion... until the dot com bubble and recession in 2001.

So in their preview of what the FOMC will do, Deutsche Bank economists predict a 25bp cut, but they say that "the key question is how Chair Powell and the Committee frame the narrative for further easing through year end." With this in mind, investors will be paying close attention to Chair Powell's press conference. DB's economists write that they "do not expect the Committee to pre-commit to another cut in September", but instead the amount of further easing is going to be data dependent. "Will a market hungry for stimulus accept this", asks Jim Reid, who then notes that: