According to BlockBeats, on September 17, with only two days left before the Federal Reserve announced a rate cut, the U.S. interest rate market was arguing over whether it would cut by 25 basis points or 50 basis points. According to data compiled by Bloomberg, this is the biggest skepticism among interest rate swap traders about any scheduled Fed meeting decision since 2007, except for the Fed's emergency rate cut in March 2020 when the epidemic broke out.
Dudley, former president of the New York Fed and a Bloomberg Opinion columnist, reiterated his support for a 50 basis point rate cut on Monday. Meanwhile, the Fed's pivot comes amid growing political tensions in the United States, with less than two months to go before the presidential election. Three Democratic senators have urged the Fed to aggressively cut its benchmark interest rate, including a 75 basis point cut this week, to protect the U.S. economy from potential damage.
Joe Tuckey, head of foreign exchange analysis at Argentex, a London-based provider of currency risk management and payment solutions, said a more aggressive rate cut by the Federal Reserve this week "will likely push the dollar to new lows," while a smaller rate cut of 25 basis points "could significantly reduce currency volatility."
