Analysis

TradingKey - The Federal Reserve has kicked off a new easing cycle with a 50 basis point rate cut, yet the market rally did not last long. Concerns loom over whether the Fed can replicate the economic soft landing achieved by Alan Greenspan in 1995.

Federal Reserve Chairman Jerome Powell explains the decision to cut the policy rate, federal funds rate, by 50 basis points to the range of 4.75%-5% after the September meeting and responds to questions in the post-meeting press conference.

Investing.com-- Citi analysts said they maintained their outlook for a 50 basis point cut by the Federal Reserve in November, after the central bank cut rates by a similar margin in its first cut since 2020. 

Investing.com-- The Bank of Japan is expected to keep interest rates unchanged at the conclusion of a two-day meeting on Friday, although policymakers could still present a hawkish outlook on expectations of higher inflation.

The Federal Reserve started the rate cutting cycle with a jumbo-sized rate cut on Wednesday, but economist believe a 50 basis point rate cut isn't the new 25bps, expecting a more measure pace of cuts ahead.

Federal Reserve Chairman Jerome Powell explains the decision to cut the policy rate, federal funds rate, by 50 basis points to the range of 4.75%-5% after the September meeting and responds to questions in the post-meeting press conference.

TradingKey - On September 18, the Federal Reserve will announce its rate decision.

TradingKey - Nick Timiraos, a spokesperson for the Federal Reserve, recently indicated a dovish outlook, leading the market to expect a 65% probability of a 50 basis point rate cut in September.

Israel said on Tuesday that halting Hezbollah’s attacks in the country’s north to allow thousands of residents to go back to their homes is now an official war goal, as it considers a wider military operation in Lebanon that could ignite an all-out conflict, according to the AP News. 

US markets are leaning firmly into bets of a 50 bps cut from the Fed.

Fitch Ratings said in its latest report on the Bank of Japan’s (BoJ) policy outlook that the “BoJ could hike rates to 0.5% by the end of 2024, 0.75% in 2025 and 1% by end-2026.”

TradingKey - The European Central Bank (ECB) has cut rates by 25 bps, as anticipated. The market expects an additional 36 bps of cuts from the ECB this year, while the Fed is projected to lower rates by 100 bps. This raises the question: Is the euro more resilient than the dollar?

TradingKey- UBS CEO Sergio Ermotti has urged the European Central Bank (ECB) to adopt a cautious approach and suggested that a "moderate" rate cut would be appropriate.

TradingKey -  On Tuesday night, the U.S. presidential debate took place, during which Trump and Harris discussed tariffs, immigration, abortion rights, and the Gaza conflict.

Investing.com-- The Chinese government is likely to roll out more, albeit incremental stimulus measures in the coming months, Citi analysts said in a note, especially amid signs that economic support from exports may have peaked. 

TradingKey - As inflation eases and signs of recession appear, the market widely expects the European Central Bank (ECB) to make its second rate cut of 2024 at the September meeting.

TradingKey - Since Vice President Kamala Harris took over from Biden in the 2024 U.S. presidential election, the political landscape has shifted dramatically.

The Federal Reserve is likely to keep the 50 basis point rate cut option in its back pocket as the pace of the economic slowdown is screaming out for a rescue with big rate cuts, according to analysts at Capital Economics.

TradingKey - This week, investors will focus on the U.S. August CPI. Following last week's disappointing non-farm payroll report, a continued decline in CPI could pave the way for a Fed rate cut in September.

Japan’s Chief Cabinet Secretary Yoshimasa Hayashi said on Monday that the “monetary policy should be considered, judged by the Bank of Japan (BoJ)” when asked about market expectations of further rate hikes by the BoJ.