The Federal Reserve Bank (Fed) is widely expected to cut interest rates on Wednesday, October 30, which would be the third cut this year after nine consecutive hikes.

The current fed funds rate target is 1.75–2%, with a 25 basis point cut likely happening this week. As discussed in Market Tricks and Treats, we think there will be only one more rate cut this year, and we don’t expect the Fed to take its policy rate below 1.5%, even in 2020.

It is important to note that the Fed started new cycles of rate cuts in 2001 and 2007 with 50 basis point cuts, implying they were more worried than they were letting o

The stock market has been hovering near record highs despite an assortment of economic and geopolitical risks. In the spirit of Halloween, we discuss some of the tricks and treats that might spook the markets between now and year-end. Trade remains the biggest worry, followed by bond markets, U.S. manufacturing activity, fear of a Fed policy misstep, and global geopolitical concerns.

U.S.-China Trade Dispute Continues

The U.S.-China trade conflict remains a wild card for U.S. and global economies, and it headlines our list of concerns. The United States and China have reportedly reached a verbal “truce,” and by a

U.S. stocks gained for a third straight week, and the S&P 500 Index brushed record highs. Stocks rose as discussions around the United Kingdom’s (U.K.) exit from the European Union (EU) (Brexit) led to U.K. lawmakers rejecting a proposal to “fast‐track” a deal before October 31. The EU is considering another Brexit deadline extension, a positive development for markets

A U.S.-China trade truce wasn’t enough to spark global manufacturing activity in October.

Manufacturing activity around the world remains sluggish despite trade progress, according to preliminary Markit Purchasing Managers’ Index (PMI) data for October. As shown in the LPL Chart of the Day, manufacturing PMIs for the Eurozone, Germany, and Japan remained near multi-year lows in October.

U.S. and China relations have improved this month as both sides became increasingly optimistic before face-to-face talks earlier this month. On October 11, the United States announced that it had reached a ve