Higher Odds of Fed Making Significant Interest Rate Increase Seen in US Interest Rate Futures
Futures on the fed funds rate are indicating a strong possibility of a 50 basis-point rate cut by the Federal Reserve on Wednesday, according to calculations. The odds of a rate cut have increased to nearly 60%, up from 45% last Friday. The Fed is expected to lower the benchmark overnight interest rate, with speculation shifting between a 50 and 25 basis-point reduction. Market forecasts for rate easing in the coming years have also seen adjustments. Former New York Fed President Bill Dudley has advocated for a significant rate cut, citing the need to align short-term Interest rates with neutral levels. Whether the Fed opts for a 50 or 25 basis-point cut, the impact on the economy will ultimately depend on the transmission mechanism and how the decision is perceived by investors.
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Emma Collins, graduated in Financial Economics from the University of Chicago in the USA in 2016. She has since worked at an asset management firm in New York, where she specializes in investment strategies and portfolio management. Emma has a keen interest in financial analysis and has published several articles in renowned financial journals. Her work focuses on providing actionable insights to investors, and she is known for her forward-thinking approach to managing financial portfolios.