I took a detailed look at the announcement of the Fed's interest rate meeting:
The first interest rate cut was 50 basis points. If the previous dot plot is followed, the interest rate cut for the whole year of 2024 will be 100 basis points, that is to say, there may be two consecutive interest rate cuts of 25 basis points in November and December.
Of course, this is the expectation of the last dot plot. The dot plot has not been released yet, so we have to wait.
At the same time, the announcement mentioned that in order to continue to consolidate 2% inflation, although the Fed has started a rate cut cycle, it will continue to reduce its holdings of US Treasury bonds, agency bonds and agency mortgage-backed securities.
To put it bluntly, it is to cut interest rates but not to release water, and it is still shrinking the balance sheet. The Fed will continue to maintain a loose policy and tightening action strategy.
After the announcement of the interest rate resolution, the market volatility is still not large. It is currently waiting for the update of the dot plot and Powell's speech later.
In this speech, the market hopes to get more information about this year's interest rate cut plan, and also hopes to get an accurate balance sheet reduction plan.
