Deutsche Bank: Fed's "Small Step" Does Not Rule Out Subsequent "Big Moves"

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September 18, 2024
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Mars Finance reports that on September 18, Deutsche Bank analysts said that after the European Central Bank (ECB) took the lead last week in cutting its deposit rate by 25 basis points, other central banks will announce their policy decisions this week. Ultimately, most decisions are likely to keep rates unchanged—except for the most important one, of course. It would be a big surprise if the Federal Reserve (Fed) didn't start its rate cut cycle on Wednesday.

Analyst Volkmar Baur stated, "Early this week, markets were pricing in a slightly higher than 50% chance of the Fed cutting rates for the first time. Our economists still expect a 25 basis point cut, and there are good reasons for that."

"However, a small first step doesn't rule out bigger moves later on. That's why the risk currently leans towards a weaker US dollar." (Jin Shi)

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