Xinan Asset Management: History Shows a 25 Basis Point Fed Rate Cut is More Likely
Gold Finance reported that Seema Shah, Chief Global Strategist at Principal Asset Management, said in a report that while some may expect the Fed to cut interest rates by 50 basis points this week, history suggests a 25 basis point cut is more likely. "Since the late 1980s... 25 basis point cuts have become the norm, 50 basis points the exception," she said. Only twice has the initial rate cut in a easing cycle been more than 25 basis points: in January 2001 during the dot-com bubble, and in September 2007 during the subprime mortgage crisis. Both periods were exceptional, characterized by concerns about severe asset price bubbles and systemic financial risks.