Goldman Sachs economists expect the Fed to cut interest rates by 25 basis points three times in a row starting in September, and believe that the market has overpriced a 50 basis point rate cut at the next meeting after the July employment data was weaker than expected. According to the latest CME data, the probability of a 25 basis point rate cut by the Fed in September is 75%, and the probability of a 50 basis point rate cut has dropped to 25%.
What people are arguing about now is no longer whether there will be a rate cut in September, but by how much it will be cut in September, 50 basis points or 25 basis points. In fact, it doesn't matter how much the rate cut will be in September. What matters is how long this cycle will last. It remains to be seen. The rate cut cycle is about to come, but obviously the pace of rate cuts has been digested by the market. Now it depends on the extent of the rate cut. Don't try to predict it in advance, and don't place heavy bets at key points.
In this world full of sickles, you have no idea whether your predictions have been predicted by the sickles. Embracing certainty is the first rule for survival in troubled times.
2. This week, the Federal Reserve officials will start speaking. These speeches will definitely include some policies and opinions for the market, so the market volatility this week is expected to be more intense, so contract players should pay attention to the risks:
At 1:35 on Wednesday, 2024 FOMC voting member and Atlanta Fed President Bostic will speak
At 2:00 on Thursday, the Federal Reserve will release the minutes of its monetary policy meeting.
The Jackson Hole Global Central Bank Annual Meeting will be held on Thursday
At 22:00 on Friday, Federal Reserve Chairman Powell will speak on the economic outlook at the Jackson Hole Annual Meeting
The rise in the market is bound to be accompanied by the recovery of liquidity, so where does the liquidity come from? See you in the comments section!