In recent days, the number of traders expecting the Fed to cut interest rates further, by around 50 basis points, has been increasing. On Wednesday morning, Fed interest rate futures were pricing in a more than 60% chance of a 50 basis point cut, a 15% increase in probability over the past week.
Although still undecided, Wilmer Stith, a bond trader at Wilmington Trust, leans toward the possibility of a 50-point Fed rate cut. He says it's "basically real."
Comments from Fed officials suggest they are likely to cut the benchmark interest rate by about a quarter of a percentage point. This means the new interest rate range would be 5.0-5.25%, down from the 23-year high of 5.25-5.5%.
Michael Feroli, chief economist at JPMorgan (one of the world's oldest financial services firms), believes the Fed needs to cut interest rates sharply. He said: "What the Fed should do is clear: Adjust the policy interest rate down by 50 basis points to adapt to the changing global economy and balance the risks."
Feroli predicts the Fed will cut interest rates by 50 basis points at today's meeting, with a further 25 basis point cut at the two meetings later this year.
However, former Kansas City Fed President Esther George expects the Fed to cut rates by only a quarter point, as the Fed will need to reserve funds for deeper cuts at subsequent meetings.
Some members, including Fed Governor Michelle Bowman, Atlanta Fed President Raphael Bostic, and Philadelphia Fed President Patrick Harker, have argued that starting with a 25-basis-point reduction is reasonable and that they are not overly concerned about a weakening labor market.
In addition to policy decisions and interest rate forecasts, Fed officials will also release forecasts for unemployment, inflation, and the economic outlook. Chairman Powell will hold a press conference at 2:30 p.m. ET.
Source: https://laodong.vn/kinh-doanh/nin-tho-cho-muc-giam-lai-suat-tu-fed-1396177.ldo
Comment (0)