Institutions' Views on a 25 Basis Point Fed Rate Cut Prediction: A Large Cut Could Spark Market Panic

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September 18, 2024
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Institutions Predicting a 25 Basis Point Fed Rate Cut:

  1. Royal Bank of Canada: Predicts a 25 basis point rate cut in September, expecting a "normalization" of the US economy rather than a recession.
  2. Standard Chartered Bank: Cites upcoming inflation data that does not support rapid convergence towards the 2% target as justification for a 25 basis point cut.
  3. Commerzbank: Highlights widespread risk aversion, oil price stabilization, and robust economic data as factors diminishing the likelihood of a 50 basis point rate cut.
  4. Maybank: Argues that a large rate cut would send a wrong signal to the market, potentially triggering panic, thus favoring a 25 basis point cut.
  5. AngelOne: With the US presidential election approaching, the Fed is unlikely to adopt a dovish stance with a 50 basis point cut. The unexpected 0.1% increase in US retail sales in August indicates a resilient US economy in the third quarter.
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1. Disclaimer: The views expressed are solely those of the author and do not reflect the stance of Gen3. They are not intended as investment advice.
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