For the past couple of weeks, the most important question for traders was whether the Fed was going to cut the Fed Funds Rate by 25 basis points or 50. On Wednesday, the Fed revealed that it would start the cutting cycle by going big and cutting by 50 points. The Fed Funds Rate is now in a range between 4.75 percent and 5 percent, and the market is pricing in additional cuts in November and December.

Those cuts could see rates drop by 100 to 125 basis points, and it’s believed that the Fed’s goal is to get the interest rate down to about 3 percent within the next year. During his press conference after the rate decision, Powell said that the move was about recalibrating policy and the economy was doing well. Many observers believed that the current rate was too high regardless of market conditions and that a cut was warranted.

Interestingly, Michelle Bowman voted against the cut suggesting that a 25-point cut was more appropriate. It marked the first dissenting vote since 2005. The major American indexes were all up sharply on the news and would continue their rallies into Thursday’s trading session.

Of course, there was other news this week that made headlines. On Tuesday, core retail sales and retail sales figures were released, and they both showed a .1 percent increase in the past month. This was below the expected .2 percent gain for core retail sales and above the projected loss of .2 percent for overall retail sales.

On Thursday, unemployment claims came in at 219,000 over the last seven days, which was lower than the expected 230,000 claims. It was also lower than last week’s figure of 231,000 claims. This is another indication that the economy is still doing well despite the Fed’s decision to cut rates so sharply.

Also on Thursday, existing home sales data was released that showed 3.86 million such sales occurred in the past month. This was slightly lower than the projected 3.92 million sales and lower than last month’s figure of 3.96 million. As the main interest rate falls, it’s expected to have a positive impact on mortgage rates and potentially get both buyers back into the market.

The S&P 500 finished just off of the all-time high that it set this week closing at 5,702. The market made a low of 5,612 on Monday morning and remained in a narrow range until after the Fed decision on Wednesday. The high of the week came on Thursday when the index hit 5,730.

As with the S&P, the Dow also hit all-time highs this week closing at 42,063. The Dow would close at the high of the week while the low was established on Monday morning when the index dipped to 41,459. The Dow would see most of its 1.21 percent weekly gain after the Fed made its decision on Wednesday afternoon.

Finally, the Nasdaq would finish the week at 17,948. Despite advancing 2.47 percent over the last five days, it would not breach any all-time highs this week. The index would hit its low of the week on Monday morning at 17,513 and would make its weekly high of 18,092 on Thursday afternoon.

In international news, the Bank of Japan (BOJ) opted early Friday morning to keep the country’s interest rate unchanged at less than .25 percent. On Thursday, the Bank of England (BOE) opted to keep that country’s interest rate unchanged at 5 percent. On Tuesday, Canada was among the first developed nations to report that its inflation was on pace to hit 2 percent on an annualized basis.

Next week is shaping up to be a busy one for market participants. On Thursday, Jerome Powell is scheduled to speak on the same day that the final gross domestic product (GDP) numbers will be released. On Friday, the Core PCE Price Index is released, which measures that change in prices on a monthly basis. It is the Fed’s preferred method for calculating inflation.

The second full trading week in September was quite consequential, as August’s inflation numbers were revealed. The Price Producer Index (PPI) was also released, which also provided some final clues before the Fed meets next week to make its latest rate decision. It’s likely that the Fed is going to cut the Funds Rate by at least 25 basis points.

This would bring it down to a range of 5 percent to 5.25 percent. It is also possible that the Fed decides to cut by 50 basis points to get ahead of potential weakness in the labor market. One of the Fed’s mandates is to create policies that lead to full employment. Therefore, it will feel compelled to act when the labor market is in any type of peril even if interest rates haven’t hit 2 percent.

On Wednesday, the August CPI revealed that inflation was 2.5 percent on an annualized basis. This result matched analyst expectations and was down from 2.9 percent a month ago. Overall CPI on a monthly basis increased by .2 percent, which was also in line with expectations. However, when food and energy costs were taken out, CPI actually rose .3 percent, higher than the expected .2 percent.

The fact that CPI minus food and energy prices came in higher than what was expected is fueling expectations that the Fed will go for a smaller rate cut. It is also expected that the Fed will cut rates again this year, which gives it additional opportunities to go large if necessary.

On Thursday, the PPI figures indicated that prices went up more than expected over the past month. On a monthly basis, overall PPI went up .2 percent while the core PPI went up .3 percent. It was believed that overall prices would go up .1 percent while core PPI would increase by .2 percent.

Unemployment claim data was also made public on Thursday morning. Over the past seven days, there were 230,000 requests for benefits, which was slightly higher than the 227,000 projected prior to the release, and it is also roughly in line with the 228,000 claims from last week.

On Friday, the University of Michigan released its preliminary consumer sentiment and inflation expectations report. Consumer sentiment came in at 69 percent, which was slightly higher than the expected 68.3 percent and higher than last month’s 67.9 percent. Inflation expectations came in at 2.7 percent compared to 2.8 percent last month. Essentially, this means that respondents think that inflation will be at 2.7 percent at this time next year.

The Dow finished the week up 1.51 percent to close at 41.393. The low of the week occurred on Wednesday morning when the market dipped to 40,026 while the high of the week of 41,505 was established on Friday afternoon.

The S&P 500 finished the week up 2.5 percent to close at 5,626. It would hit its low of the week on Tuesday when it dipped to 5,410 and would make a high of 5,632 on Friday afternoon.

Finally, the Nasdaq would finish the week up 4.14 percent to close at 17,683. As with the other two major indexes, the Nasdaq would make its low of the week on Wednesday and its high of the week on Friday. The low of the week was 16,802 while the high for the last five trading days was 17,699.

The upcoming week is going to be an interesting one both in the United States and around the globe. On Wednesday afternoon, the Fed will make its latest rate decision, which should be a rate cut of 25 to 50 basis points. Japan will also make its next rate decision late Thursday night or early Friday morning, and it is expected to keep its interest rate unchanged.

Also in the United States, retail sales data will be released on Tuesday while Fed Member Harker is expected to speak on Friday. Retail sales are expected to have dropped .2 percent overall on a monthly basis while core retail sales figures are expected to rise by .2 percent on a monthly basis.