FOMC Keeps Cuts On The Table K-To The Moon - Tiger Brokers Online Investing Community - To The Moon

FOMC Keeps Cuts On The Table

Keep abreast of the latest economics research

Economics Research

14 Jun 2024

US: May inflation data should give Fed comfort; We believe 2 cuts in 2024 remain on the table

China: GBA boasts deep-rooted innovative culture incl. China's top tech firms & hi-tech enterprises

Thailand: Improving economy supported by domestic demand, foreign tourism, & goods exports

Article image

Photo credit: Unsplash

US: Fed tilts hawkish; we still anticipate two cuts in 2024. Back in their March meeting, the Federal Open Market Committee’s (FOMC) members were almost evenly split between two and three rate cuts, slightly tilting toward three. In their June meeting, they remained close to evenly split between one and two cuts, this time tilting marginally towards one. Revising up end 2024 core inflation forecast by 20 bps to 2.8%, they signalled slower-than-anticipated progress towards the 2% inflation target. However, May inflation data (CPI was flat m/m) released the same day as the FOMC meeting should give some comfort to the inflation picture. Fed Chair Powell, in his press conference, saw the latest data positively but stressed that more progress needed to be seen.

By the time the September policy meeting takes place, we believe there will be plenty of data available for FOMC members to see that inflation worries have abated largely; From manufacturers’ input price to insurance costs, rentals to medical services, as well pump price of gasoline, there is room for a stable or receding inflation outcome in the coming months. In this scenario, a September cut could be readily followed by one in December.

We concede that the two rate cuts scenario is not materially more likely than the one-cut scenario. In fact, at the tail end of the probability distribution looms a no-cut scenario, taking into account the possibility that soaring asset prices could spill over into consumer prices, along with a still-strong labour market.

When the rate cut comes, it will not be one reflecting great worries about jobs or financial stability, but rather one aimed at keeping real interest rates stable. It could therefore signal a shallow rate cut cycle through 2025, something the markets would have to reckon with eventually. For now, the key issue is the timing of the first cut in this cycle - we maintain our stance on September.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap

Leave a comment

1

{"i18n":{"language":"en_US"},"detailType":1,"isChannel":false,"data":{"magic":2,"id":319290784403536,"tweetId":"319290784403536","gmtCreate":1718981022509,"gmtModify":1720496800382,"author":{"id":3556108097637134,"idStr":"3556108097637134","authorId":3556108097637134,"authorIdStr":"3556108097637134","name":"KelvinChin","avatar":"https://community-static.tradeup.com/news/1723500e31fb2638e365fc5411b59d42","vip":1,"userType":1,"introduction":"","boolIsFan":false,"boolIsHead":false,"crmLevel":6,"crmLevelSwitch":1,"currentWearingBadge":{"badgeId":"972123088c9646f7b6091ae0662215be-2","templateUuid":"972123088c9646f7b6091ae0662215be","name":"Master Trader","description":"Total number of securities or futures transactions reached 100","bigImgUrl":"https://static.tigerbbs.com/ad22cfbe2d05aa393b18e9226e4b0307","smallImgUrl":"https://static.tigerbbs.com/36702e6ff3ffe46acafee66cc85273ca","grayImgUrl":"https://static.tigerbbs.com/d52eb88fa385cf5abe2616ed63781765","redirectLinkEnabled":0,"hasAllocated":1,"isWearing":1,"stampPosition":0,"hasStamp":0,"allocationCount":1,"allocatedDate":"2024.08.18","exceedPercentage":"80.98%","individualDisplayEnabled":0},"individualDisplayBadges":[],"fanSize":12,"starInvestorFlag":false},"themes":[],"images":[],"coverImages":[],"html":"<html><head></head><body><p>FOMC Keeps Cuts On The Table</p>\n<p>Keep abreast of the latest economics research</p>\n<p>Economics Research</p>\n<p>14 Jun 2024</p>\n<p>US: May inflation data should give Fed comfort; We believe 2 cuts in 2024 remain on the table</p>\n<p>China: GBA boasts deep-rooted innovative culture incl. China's top tech firms &amp; hi-tech enterprises</p>\n<p>Thailand: Improving economy supported by domestic demand, foreign tourism, &amp; goods exports</p>\n<p>Article image</p>\n<p>Photo credit: Unsplash</p>\n<p>US: Fed tilts hawkish; we still anticipate two cuts in 2024. Back in their March meeting, the Federal Open Market Committee’s (FOMC) members were almost evenly split between two and three rate cuts, slightly tilting toward three. In their June meeting, they remained close to evenly split between one and two cuts, this time tilting marginally towards one. Revising up end 2024 core inflation forecast by 20 bps to 2.8%, they signalled slower-than-anticipated progress towards the 2% inflation target. However, May inflation data (CPI was flat m/m) released the same day as the FOMC meeting should give some comfort to the inflation picture. Fed Chair Powell, in his press conference, saw the latest data positively but stressed that more progress needed to be seen. </p>\n<p>By the time the September policy meeting takes place, we believe there will be plenty of data available for FOMC members to see that inflation worries have abated largely; From manufacturers’ input price to insurance costs, rentals to medical services, as well pump price of gasoline, there is room for a stable or receding inflation outcome in the coming months. In this scenario, a September cut could be readily followed by one in December. </p>\n<p>We concede that the two rate cuts scenario is not materially more likely than the one-cut scenario. In fact, at the tail end of the probability distribution looms a no-cut scenario, taking into account the possibility that soaring asset prices could spill over into consumer prices, along with a still-strong labour market.</p>\n<p>When the rate cut comes, it will not be one reflecting great worries about jobs or financial stability, but rather one aimed at keeping real interest rates stable. It could therefore signal a shallow rate cut cycle through 2025, something the markets would have to reckon with eventually. For now, the key issue is the timing of the first cut in this cycle - we maintain our stance on September.</p></body></html>","htmlText":"<html><head></head><body><p>FOMC Keeps Cuts On The Table</p>\n<p>Keep abreast of the latest economics research</p>\n<p>Economics Research</p>\n<p>14 Jun 2024</p>\n<p>US: May inflation data should give Fed comfort; We believe 2 cuts in 2024 remain on the table</p>\n<p>China: GBA boasts deep-rooted innovative culture incl. China's top tech firms &amp; hi-tech enterprises</p>\n<p>Thailand: Improving economy supported by domestic demand, foreign tourism, &amp; goods exports</p>\n<p>Article image</p>\n<p>Photo credit: Unsplash</p>\n<p>US: Fed tilts hawkish; we still anticipate two cuts in 2024. Back in their March meeting, the Federal Open Market Committee’s (FOMC) members were almost evenly split between two and three rate cuts, slightly tilting toward three. In their June meeting, they remained close to evenly split between one and two cuts, this time tilting marginally towards one. Revising up end 2024 core inflation forecast by 20 bps to 2.8%, they signalled slower-than-anticipated progress towards the 2% inflation target. However, May inflation data (CPI was flat m/m) released the same day as the FOMC meeting should give some comfort to the inflation picture. Fed Chair Powell, in his press conference, saw the latest data positively but stressed that more progress needed to be seen. </p>\n<p>By the time the September policy meeting takes place, we believe there will be plenty of data available for FOMC members to see that inflation worries have abated largely; From manufacturers’ input price to insurance costs, rentals to medical services, as well pump price of gasoline, there is room for a stable or receding inflation outcome in the coming months. In this scenario, a September cut could be readily followed by one in December. </p>\n<p>We concede that the two rate cuts scenario is not materially more likely than the one-cut scenario. In fact, at the tail end of the probability distribution looms a no-cut scenario, taking into account the possibility that soaring asset prices could spill over into consumer prices, along with a still-strong labour market.</p>\n<p>When the rate cut comes, it will not be one reflecting great worries about jobs or financial stability, but rather one aimed at keeping real interest rates stable. It could therefore signal a shallow rate cut cycle through 2025, something the markets would have to reckon with eventually. For now, the key issue is the timing of the first cut in this cycle - we maintain our stance on September.</p></body></html>","text":"FOMC Keeps Cuts On The Table Keep abreast of the latest economics research Economics Research 14 Jun 2024 US: May inflation data should give Fed comfort; We believe 2 cuts in 2024 remain on the table China: GBA boasts deep-rooted innovative culture incl. China's top tech firms & hi-tech enterprises Thailand: Improving economy supported by domestic demand, foreign tourism, & goods exports Article image Photo credit: Unsplash US: Fed tilts hawkish; we still anticipate two cuts in 2024. Back in their March meeting, the Federal Open Market Committee’s (FOMC) members were almost evenly split between two and three rate cuts, slightly tilting toward three. In their June meeting, they remained close to evenly split between one and two cuts, this time tilting marginally towards one. Revising up end 2024 core inflation forecast by 20 bps to 2.8%, they signalled slower-than-anticipated progress towards the 2% inflation target. However, May inflation data (CPI was flat m/m) released the same day as the FOMC meeting should give some comfort to the inflation picture. Fed Chair Powell, in his press conference, saw the latest data positively but stressed that more progress needed to be seen. By the time the September policy meeting takes place, we believe there will be plenty of data available for FOMC members to see that inflation worries have abated largely; From manufacturers’ input price to insurance costs, rentals to medical services, as well pump price of gasoline, there is room for a stable or receding inflation outcome in the coming months. In this scenario, a September cut could be readily followed by one in December. We concede that the two rate cuts scenario is not materially more likely than the one-cut scenario. In fact, at the tail end of the probability distribution looms a no-cut scenario, taking into account the possibility that soaring asset prices could spill over into consumer prices, along with a still-strong labour market. When the rate cut comes, it will not be one reflecting great worries about jobs or financial stability, but rather one aimed at keeping real interest rates stable. It could therefore signal a shallow rate cut cycle through 2025, something the markets would have to reckon with eventually. For now, the key issue is the timing of the first cut in this cycle - we maintain our stance on September.","highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"favoriteSize":0,"link":"https://ttm.financial/post/319290784403536","repostId":0,"isVote":1,"tweetType":1,"viewCount":188,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[".SPX"],"verified":2,"subType":0,"readableState":1,"langContent":"EN","currentLanguage":"EN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":1972,"xxTargetLangEnum":"ORIG"},"commentList":[],"isCommentEnd":true,"isTiger":false,"isWeiXinMini":false,"url":"/m/post/319290784403536"}