2024.9.22:
The Fed cut interest rates by 50 basis points, a bold start to the interest rate cut cycle
On September 19, the Fed started a rate cut cycle, lowering the federal funds rate by 50 basis points to 4.75%-5.00%, the first rate cut since March 2020. Nick Timiraos, a reporter for the Wall Street Journal who is known as the "Federal Reserve's mouthpiece," said that the Fed's 50BP rate cut marked a bold start to the rate cut. According to statistics, the last time the Fed cut interest rates by 50 basis points was in March 2020, after which Bitcoin's maximum increase was more than 10 times.
The median of the Fed's dot plot: a cumulative interest rate cut of 100 basis points in 2024
On September 19, the Fed's dot plot showed that among the 19 officials, 2 officials believed that interest rates should not be cut further in 2024, 7 officials believed that interest rates should be cut by another 25 basis points in 2024, 9 officials believed that interest rates should be cut by another 50 basis points in 2024, and 7 officials believed that interest rates should be cut by another 75 basis points in 2024.
Goldman Sachs, Citigroup, and Morgan Stanley predict the Fed's future interest rate cut path
On September 19, Goldman Sachs, Citigroup, Morgan Stanley, and other Wall Street's largest brokerages, predicted the Fed's future interest rate cut path. Bank of America expects the Fed to cut interest rates by 75 basis points in the fourth quarter and another 125 basis points in 2025. Goldman Sachs maintained its forecast for the Fed to cut rates by 25 basis points at its November and December meetings this year. Citigroup maintained its forecast for the Fed to cut rates this year at 125 basis points, but now expects the Fed to cut rates by 25 basis points in December, compared with the previous forecast of 50 basis points. In addition, the bank expects more 25 basis point cuts in 2025, pushing the terminal rate to a range of 3%-3.25%. Other brokerages such as Macquarie and Deutsche Bank have retained their expectations for two more 25 basis point cuts from the Fed this year. Economist Seth Carpenter and strategist Matthew Hornbach of the Morgan Stanley team said that a series of conventional rate cuts (25 basis points) may be chosen by mid-2025, two cuts this year and four cuts in the first half of next year.
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