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Here is what major banks are expecting from FED meeting
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Loading...Today, world markets are keenly awaiting the outcome of the all-important Federal Open Market Committee (FOMC) monetary policy decision for the month of October, which will be announced at 20:00 (GMT +2). As we move towards the decision timings, here is a sneak preview of the expectations of the economists and researchers of major banks regarding the outcome of the meeting.
The consensus amongst most economists and analysts suggest that the Fed will deliver its third consecutive cut since July of 25bps.
Danske Bank
Danske Bank analysts expect the Federal Reserve will cut rates again by 25bps.
“While economists are evenly divided between those expecting a cut and those expecting the Fed to remain on hold, investors have nearly fully priced in a cut (90% probability, according to Bloomberg).”
TD Securities
“We expect the Fed to cut rates by 25bp, delivering the third consecutive cut since July,” TD Securities analysts said previewing Wednesday Federal Open Market Committee (FOMC) meeting.
“The FOMC should communicate patience in deciding future policy moves as they assess the impact of the three cuts they have already delivered. We look for the Fed to temporarily pause before resuming rate cuts in Q1 2020.”
Deutsche Bank
“A 25bp cut is all but priced in but the bigger focal point for markets is what message the Fed wants to send.”
Rabobank
“We expect the Fed to cut the target range for the federal funds rate by 25 bps on October 30.”
“The Fed may also indicate that it thinks the mid-cycle adjustment has come to an end.”
“However, we expect a recession in 2020 that will force the Fed to cut rates all the way to zero before the end of 2020.”
Westpac
“Pricing for the FOMC to cut the funds rate for a third consecutive time, from 1.75-2.00% to 1.50-1.75%, is above 90%. Pricing for another move in December is only about 20%. Arguably the FOMC could hold steady as it waits for clarity on US-China trade relations and with the US stock market at a record high.”
ANZ
“A rate cut from the Fed looks a done deal this week as it takes out more insurance against elevated external risks.”
“Forward policy guidance may point to the FOMC taking some time out to observe the impact of recent cuts.”
“The risk is for more easing, at some point, given low inflation expectations, modestly above trend growth and elevated downside risks.”
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