The Fed Preview: Let The Easing Cycle Begin - A 25bpt Cut And The Market Selloff Likely
Summary
- The Fed is likely to cut by 25bpt next week, and the market reaction could be negative as the market hopes for a 50bpt cut.
- The bond market is pricing an aggressive policy easing, generally associated with a recession, thus, the S&P500 is facing a recessionary bear market.
- A policy normalization with a soft landing might not be possible, as only a recession can restore price stability, given the immigration dynamics.
Nathan Howard
The beginning of the easing cycle
The Fed is set to start a monetary policy easing cycle on Wednesday at the September FOMC meeting. The CME Federal Funds futures are indicating a 50% probability that the first cut will
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.
