As trade war tensions go higher, recently Markets now expect the Federal Reserve to cut interest rates twice by late January 2020 as economic signs continue to weaken and stocks market in Wall Street stumbles through another rough patch.
Meanwhile, commodities and Futures trading indicated a 63% chance of a September cut and a 62% probability of another easing by late January, according to the CME's FedWatch tool.
The long term projection said, The market-implied funds rate is 2.1% by the end of 2019, compared with the current target range of 2.25% to 2.5% for the Fed's benchmark.
But still the most important thing, Anticipation for a rate hike comes just a week after minutes from the Federal Open Market Committee meeting earlier this month indicated that members of Federal reserve commission had a strong level of confidence in the economy, with members saying they were even marking up their GDP estimates for the full year, it's just a bit of new stuff for confidence level. The meeting summary said no moves would be coming "for some time." we think this is the new clue
Odd for Federal reserve cut has increase, However, a number of indicators have changed since then, and government bond yields are pointing to an economic slowdown. Bonds market has been telling us about the recession, that all US economy is slowly growing, The benchmark 10-year Treasury traded around 2.21% at midday Wednesday, a level it has not seen since September 2017 and, importantly, below the fed funds rate that banks charge each other for overnight lending.
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