Breaking News: Citi Analysts Predict 50 Basis Point Cut by Federal Reserve in November
In a bold move, the Federal Reserve recently announced a 50 basis point cut, setting the range at 4.75% to 5%. This decision comes after the central bank's first rate cut since 2020, signaling more cuts could be on the horizon. Fed Chair Jerome Powell expressed confidence in easing inflation and hinted at further cuts in the coming months.
Citi analysts believe this cut marks a shift towards addressing labor market weaknesses over inflation risks. They predict another 50 bps cut in November, followed by a 25 bps cut to close out the year. This would bring the total reductions for 2024 to 125 bps.
Powell's cautious tone on payroll growth suggests that any further labor market weakness could prompt more dovish moves from the Fed. However, he also emphasized that the Fed is unlikely to return to ultra-low rates, indicating a higher neutral rate than in the past.
In conclusion, investors should pay attention to the Fed's actions as they could impact the economy and financial markets. Stay informed and be prepared for potential rate cuts in the coming months.