Nick Timiraos in magazine (Closed) Writes about the Federal Reserve’s questions about whether it should cut interest rates by the traditional 0.25 percentage point or by a larger 0.5 percentage point at next week’s meeting.
He says:
- Powell kept all his options open.
- The Fed is concerned about keeping interest rates too high for too long.
- Firmer housing costs in Wednesday’s CPI report weakened the case for a deeper cut.
- Hiring in June and July was weaker than initially reported, but payroll growth improved in August
and:
- The answers to the tactical question of how quickly the central bank should move could reveal clues about the central bank’s broader strategy. The size of the cuts over the next few months “is going to be much more important than whether the first step is 25 or 50, which I think is a close call,” said John Faust, who until earlier this year served as a senior adviser to Powell.
25 basis points is the market bias at the moment, but there is still an expectation of 50 basis points.
What are your predictions? Tell me in the comments. I’m 25bp.
This article was written by Eamonn Sheridan on www.forexlive.com.
Comments are closed, but trackbacks and pingbacks are open.