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Futures on the fed funds rate are indicating a strong possibility of a 50 basis-point rate cut by the Federal Reserve on Wednesday, according to calculations. The odds of a rate cut have increased to nearly 60%, up from 45% last Friday. The Fed is expected to lower the benchmark overnight interest rate, with speculation shifting between a 50 and 25 basis-point reduction. Market forecasts for rate easing in the coming years have also seen adjustments. Former New York Fed President Bill Dudley has advocated for a significant rate cut, citing the need to align short-term Interest rates with neutral levels. Whether the Fed opts for a 50 or 25 basis-point cut, the impact on the economy will ultimately depend on the transmission mechanism and how the decision is perceived by investors.

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