I expect to see a rate cut of 50 basis points, adds CNBC’s Steve Liesman on Fast Money.
Whatever the size of the rate cut, commercial banks' prime lending rate for millions of consumer loans would drop by a corresponding amount. That’s particularly attractive to Liesman. He says, “a cut gets me a reduction in my home equity loan which is tied to the prime rate.”
Of course the same would be true for millions of other Americans. The prime rate, now at 4.5 percent, is used to peg home equity loans, certain credit cards and other floating rate loans.
Under either scenario -- a half percentage point or a quarter point cut -- both the Fed's key rate and the prime rate would fall to their lowest level in more than four years.
The Bottom Line: The market has convinced itself a rate cut is coming and the Fed won’t want to disappoint the market.
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Trader disclosure: On Oct.28 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Macke Owns (WMT), (SDS), (UUP), (MCD); Seymour Owns (AAPL), (F), (MER), (TSO), (RIO); Seygem Asset Management Owns (EEM); Finerman Owns (GS); Finerman's Firm Owns (TSO), (VLO); Finerman's Firm Is Short (BBT), (IYR), (IJR), (MDY), (SPY), (IWM), (USO); GE Is The Parent Company Of CNBC