Gold Finance reported that investors are betting on a significant interest rate cut from the Federal Reserve this week, but they are likely to be disappointed as the US economy simply doesn't warrant an aggressive rate cut. According to the CME's FedWatch tool, US interest rate futures prices currently show a 65% chance of a 50 basis point cut and a potential 116 basis point cut this year. However, a series of economic data released on Tuesday prompted the Atlanta Fed to revise its US third-quarter GDP growth forecast from 2.6% to 3.0%, indicating that the economy isn't as bad as previously thought.

After weighing all factors, the Fed might only cut rates by 25 basis points, and Powell could reiterate data dependency. The Fed's dot plot is unlikely to confirm the current pricing for aggressive, rapid rate cuts, but rather show a more measured pace of rate cuts. This could be interpreted as a "hawkish rate cut," forcing investors who rushed to bet on significant rate cuts to cover their positions. (Gold Ten)