December Rate Cut Could Lift This ETF

Core Viewpoint - Expectations for the Federal Reserve to lower interest rates in December have increased significantly, with odds rising to nearly 80% from 40% [1] Group 1: Federal Reserve Actions - The shift in expectations may be a strategic move by Fed Chairman Jerome Powell, potentially to secure his position [2] - The change in sentiment follows weeks of hawkish views from the Fed's policy-setting committee, which had previously advocated for a pause in rate cuts due to inflation concerns and strong economic growth [3][5] - Some Fed members, including New York Fed President John Williams, believe current monetary policy is still somewhat restrictive, indicating potential for further adjustments to the federal funds rate [4][5] Group 2: Impact on ETFs - Fixed income ETFs, particularly the Neuberger Berman Total Return Bond ETF (NBTR), could benefit from a rate cut, positioning it as a better alternative to traditional passive bond funds [2][3] - NBTR's smaller roster of 445 bonds reflects the management team's conviction and flexibility in response to changing interest rates [4] - The potential for a "Santa Claus rally" in ETFs like NBTR is suggested, as the market adjusts to the new expectations surrounding rate cuts [5]