The easy part for the Federal Reserve on Wednesday will be announcing an interest rate cut when it wraps up its two-day policy meeting. The hard part will be taking care of other details that are presenting substantial challenges to policymaking these days.
Markets are assigning a nearly 100% probability that the Federal Open Market Committee will approve a second consecutive quarter percentage point, or 25 basis point, reduction in the federal funds rate. The overnight lending benchmark is currently targeted between 4%-4.25%.
Beyond that, policymakers are likely to debate, among other things, the future path of reductions, the challenges posed by a lack of economic data and the timetable for ending the reduction in its asset portfolio of Treasurys and mortgage-backed securities.
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