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Traders on Wednesday upped bets that the Federal Reserve would continue to aggressively cut interest rates this year after the central bank began its long-awaited easing cycle with a 50-basis point cut.

The Fed on Wednesday lowered its federal funds rate target range to between 4.75% and 5% from 5.25% to 5.5%. The cut met investors’ expectations that the central bank would begin this rate-cutting cycle with aggressive action as it seeks to bolster a cooling labor market while sustaining inflation’s downward drift toward its 2% annual target rate; the market's perceived odds of a 50-point cut rose from just 14% a week ago to more than 60% earlier this week. 

Wall Street took Wednesday’s policy pivot as a sign of more aggressive cuts to come. Traders now see a more than 50% chance that the Fed will lower its federal funds rate target range by another 75 basis points to between 4% and 4.25% by the end of the year. With only two Fed meetings left—one in November and one in December—that implies another 50-point cut at one of those meetings. 

Fed officials don’t expect this year’s rate reductions to be quite that dramatic, according to their quarterly economic projections. Nine of the 19 Federal Open Market Committee (FOMC) members who submitted forecasts estimated the policy rate would end the year between 4.25% and 4.5%. Only one member expects the next two cuts to match the market’s expectations. Two members don't expect to cut rates at all later this year.

Policymakers expect interest rates to be slightly lower in the near term relative to their prior estimates, which were published in June. The FOMC's consensus is that the rate will stand at 3.4% at the end of 2025, down from an estimate of 4.1% in June.

However, the long-run neutral rate, at which policy is neither restrictive nor accommodative, is forecast to be slightly higher (2.9%) than previously forecast (2.8%). Markets, meanwhile, saw a nearly 60% chance that the fed funds rate will be below 3% within the next 12 months.

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Canada has announced plans to splash international student permits and tighten foreign worker regulations in 2025.

This move, announced on Wednesday, is part of a broader effort to decrease the number of temporary residents in the country.

The decision follows several recent measures aimed at addressing the record immigration levels that have pushed Canada’s population beyond 41 million earlier this year.

Prime Minister Justin Trudeau’s government has pointed to the high immigration as straining the country’s housing sector, jobs market and social services.

“It is a privilege to come to Canada, not a right,” Immigration Minister Marc Miller stated during a press conference.

For 2025, Ottawa plans to issue 437,000 study permits to international students, a decrease from 485,000 this year and more than 500,000 in 2023.

The government is also introducing new restrictions on work permits for the spouses of some international students and foreign workers.

Additionally, there will be increased scrutiny before issuing travel visas to address a rise in fraudulent or rejected asylum claims.

Ottawa has already announced its intention to reduce the proportion of temporary residents to five percent of the population, down from 6.8 percent in April.

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Bitcoin rose Wednesday after the Federal Reserve's interest-rate announcement, with the U.S. central bank cutting its benchmark interest rate for the first time in years.

The Fed cut rates by half a percentage point in a bid to help prevent a labor market slowdown. Investors broadly expected a rate cut, though some expected a smaller cut of 25 basis points. Further cuts are expected through the end of the year, according to the CME Group's FedWatch Tool.

The news supported cryptocurrency prices, with bitcoin recently near $61,000 and ether above $2,300. Crypto asset prices tend to rise on signs of monetary easing, as they are broadly seen as risk-on assets even as some investors tout their use as safe havens.

Shares of crypto exchange Coinbase Global (COIN) were recently up more than 2%, while MicroStrategy (MSTR) was ahead more than 5%.

After briefly rising above $70,000 in July, bitcoin has struggled to stay above $60,000 over the past couple of months.

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Stocks rose slightly on Wednesday in the immediate aftermath of the Federal Reserve's first interest-rate cut in more than four years, a half-percentage-point reduction.

The S&P 500 traded near a record high after rebounding from a slump in July and August, when concerns about a slowing labor market and the possibility of recession reached their peak.

Since then, stocks have rallied, assisted by data showing cooling inflation and a resilient economy, as well as comments by Fed officials, who made clear their intention to begin cutting interest rates to support a soft landing. 

Wall Street, according to a recent Deutsche Bank analysis, has good reason to be optimistic about the market's future.

Analysts evaluated the S&P 500's performance over every Fed easing cycle in the past 70 years and found that rate cuts haven't prevented the stock market from falling in past recessions. However, when the Fed has cut rates outside of a recession, stocks have tended to soar. The S&P 500's median two-year return after that kind of cut has been nearly 50%.

Most economists see only a slight chance that the U.S. enters a recession in the next year. Goldman Sachs' lead economist, Jan Hatzius, in August lowered the firm's recession prediction to 20% from 25%. That adjustment came after the July jobs report triggered the "Sahm rule," a historically reliable recession indicator.

Plenty of other economists have discounted recent recession indicators, including the steepening of the yield curve out of inversion, noting the peculiarity of the post-COVID economic recovery. 

But a post-rate-cut rally isn't a certainty, and that's in no small part because of stocks' recent strength.

The S&P 500 has risen more than 26% in the past year, its best performance in the lead-up to rate cuts on record, according to Deutsche Bank. Usually, the index is flat over that period. 

"So you could argue that some of a potential 'no recession easing cycle' gains have been borrowed from the future this time," the analysts wrote. 

The stock market's anticipation of rate cuts has been nowhere more visible than in the surging stocks of homebuilders. The S&P Homebuilders Select Industry Index has risen 3.8% this month, in the top three gainers for S&P industry indexes. 

Homebuilder and building products stocks have been buoyed in recent months by the expectation that lower mortgage rates will unleash pent-up demand for new housing and revive the long-dormant housing market. That expectation has been borne out by data showing new home sales increased more than expected in July as mortgage rates fell.

Other early beneficiaries of rate cuts include regional banks (+15% quarter-to-date), whose Treasury and commercial real estate portfolios were hit hard by rising interest rates, and insurance (+13%). 

As with the S&P 500, however, analysts say stocks in these sectors may already have rate cuts priced in, limiting their near-term upside.

Homebuilder stocks, wrote Bank of America analysts on Tuesday, have a history of outperforming in the lead-up to and immediately after the beginning of a Fed easing cycle. However, they said, mortgage rates already have fallen to a two-year low and, as of last week, sat just slightly above the firm's year-end forecast of 5.75% to 6%, possibly leaving little room for improvement. Plus, their recent rally has homebuilder stocks trading at elevated valuations compared with prior rate-cutting cycles.

Historically, defensive sectors have tended to perform best in the six months after the Fed's first rate cut, according to a recent report from Jeff Buchbinder, chief equity strategist at LPL Financial.

In 1995—when the Fed cut rates into a soft landing and the buildout of the internet was in its early phases, making it the cycle that most closely resembles today's—healthcare and telecoms were the best-performing sectors six months after the first cut. Consumer staples and utilities also outperformed, Buchbinder wrote.

Meanwhile tech stocks, despite the nascent internet buildout and the initial public offering (IPO) of browser pioneer Netscape, slumped nearly 20% in the six months after the first cut in 1995.

To be sure, the Fed has only embarked on four rate-cutting cycles since the introduction of the S&P Global Industry Classification Standard (GICS) in the 1990s, making this an exceptionally short history, as Buchbinder warns.

Still, with substantial economic and political uncertainty likely to hang over markets well into the fall, the "risk-off" lessons of 1995 could be constructive.

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Nollywood actress Bisola Badmus has opened up on the challenges she is facing co-parenting with Fuji musician Wasiu Ayinde, better known as KWAM 1 De Ultimate.

Speaking with Biola Adebayo, she said: “From the beginning, he accepted the boy as his son but he suddenly changed. What I want from K1 is to be responsible for Malik, his son. I just want him to take care of his son.”

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Police operatives in Osun State have arrested seven suspected rit¥@lists for allegedly being in possession of h¥man body parts.

The suspects: Johnson Daniel, Adetunji Okunade, Olaniyan Azeez, Balogun Temitope Asimiyu, Oladapo Hammed, Kazeem Rasak and Asaka Rauf were arrested following a tip-off from a concerned citizen.

The Deputy Police Public Relations Officer, Giwa-Alade Emmanuel, disclosed this while parading the suspects at the Command headquarters in Osogbo on Wednesday, September 18.

Emmanuel said suspected human bone fragments, female pants and note books were recovered as exhibits from the suspects at the point of arrest.

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