Institution: Fed Dot Plot May Challenge Market's Optimistic Rate Cut Sentiment
Gold Finance reported that Elmar Voelker, senior fixed income analyst at Landesbank Baden-Württemberg (LBBW), said in a report that the new interest rate projections, known as the dot plot, to be released by the Federal Reserve at its meeting next week, are unlikely to align with the current heightened expectations of interest rate cuts. He stated, "Whether the forecast adjustments can keep pace with market expectations seems at least questionable." This also applies to the forecasts for 2025. Voelker said the dot plot could become "a potential stumbling block for bond price increases." Markets are speculating that the Fed could cut rates by 50 basis points next week, but the bank's recent projections only hint at a 25 basis point cut this year.