The Fed to cut rates two more times by the end of the year

The tone and substance of the press conference after the July 31st meeting showed that the Fed is getting more concerned about the global economy and trade uncertainties, which have intensified over the last days.

Highlights:

  • The tone and substance of the press conference after the July 31st meeting showed that the Fed is getting more concerned about the global economy and trade uncertainties, which have intensified over the last days.
  • This and the deterioration shown by the latest economic indicators lead us to update our Fed call. We keep continue to expect another 25 bps cut in September but bring forward to Q4 the final 25 bps cut we projected for the beginning of 2020.
  • A cut at the December meeting still seems more likely than one in October, as it would come in conjunction with a new set projections. Risks remain tilted to bolder accommodation, though.

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THE FED TO CUT
RATES TWO MORE
TIMES BY THE END OF
THE YEAR

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Edited by the Macro & Market Research Team. The team of 13 analysts based in Paris, Cologne, Trieste, Milan and Prague runs qualitative and quantitative analysis on macroeconomic and financial issues.
The team translates macro and quant views into investment ideas that feed into the investment process.