From Investing.com: 2024-09-14 04:36:00

1. The financial markets anticipated more rate cuts in the federal funds rate (FFR) than expected, with two to three cuts predicted at most for 2024.

2. Market expectations for rate cuts are high following a weak employment report, with odds at 70% for a 25bps cut in September and further cuts anticipated for November and December FOMC meetings.

3. The FFR futures market expects multiple 25bps rate cuts over the next six and 12 months, with projections suggesting the FFR could fall to 3.75% in six months and 3.00% in 12 months.

4. Our assessment remains cautious, expecting the economy to surprise positively despite market expectations of lower FFR projections in the future.

5. The Fed’s intent to lower the FFR may boost economic growth, with inflation expected to reach close to the 2.0% target, leading to potential real economic growth from productivity rather than employment.



Read more at Investing.com: Here’s All You Need to Know About Fed’s Rate Cut Cycle That Kicks Off Next Week