Traders in the fed funds futures market on Monday were pricing in a 34% chance that the Fed will stay put on rates.
"I can't think of another time recently that the Fed had this much of an about-face within a month or a few weeks of their meeting date," said Jim Paulsen, chief investment strategist at the Leuthold Group. "I still think they do 25 [basis points], but the case is weak."dating back to early June, boosting the Citi Economic Surprise Index to its highest level since February.
"Powell has been putting his foot in his mouth at post-meeting press conferences. Will he suggest that this mid-cyle cut is at its end?" said Michael Arone, chief investment strategist for State Street Global Advisors. The market and the Fed actually have come closer to together in recent days in terms of the outlook for rates in the longer term. But the two sides still remain a fair distance apart, as the Fed ultimately sees the rate cuts ending and the funds rate actually drifting higher, while the market is still pricing in about three more rate cuts before the cycle ends in mid-2021.Arone sees the U.S.-China dispute as key to what happens ahead.
"The market is pricing in a great number of cuts over the coming quarters than perhaps the Fed is willing to suggest at this point," he said. "Investors have concluded that without the U.S.-China trade conflict, it's probably not likely that the Fed would be cutting rates at this point."
Singapore Latest News, Singapore Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Trump Demands “Boneheads” at the Fed Cut Rates to Zero “or Less”The president also said we should just refinance the $22.5 trillion U.S. debt load like it’s a failed Atlantic City casino.
Read more »
Ron Paul: US interest rates are going negative, and the Fed can't stop itFormer presidential candidate Ron Paul is warning negative interest rates will crush the global economy.
Read more »
Facebook is reportedly meeting with the Fed and other central banks to discuss libraLibra representatives are in Switzerland to meet with officials from 26 global central banks, according to a report.
Read more »
With rate cut likely, market wonders how low Fed will goWith U.S.-China trade tensions roiling markets, investors are counting on suppor...
Read more »
Fed trades 'remarkably positive' for 'no precedents' after volatile yearA year ago, U.S. Federal Reserve Chair Jerome Powell held a 'remarkably pos...
Read more »
Trump says Fed officials ‘don’t have a clue’ and should follow the lead of China’s central bankPresident Donald Trump lashed out at Federal Reserve officials once again early Monday, a day before the start of a pivotal monetary policy meeting.
Read more »