09:53 AM EDT, 09/17/2024 (MT Newswires) -- D.A. Davidson said it is not ruling out a 50-basis-point policy rate cut from the Federal Reserve on Wednesday, although the central bank is widely anticipated to announce a 25-basis-point cut.

"We also believe Fed commentary will indicate continued cuts are likely at subsequent meetings (two additional Fed meetings in 2024, November and December) and well into 2025," D.A. Davidson said in a research note. "Uncertainty can lead to market volatility."

D.A. Davidson noted Fed Chair Jerome Powell's previous comment that it is now appropriate to start lowering rates as the Fed's restrictive policy to fight inflation was successful.

"Perhaps the biggest surprise has been a resilient US economy in the face of elevated interest rates, although we attribute some economic upside to deficit spending by the federal government," according to the note.