Expectations of Fed rate cuts trigger market volatility: There are rumors in the market that the Fed may cut interest rates by 50 basis points, not just the 25 basis points that were generally expected before. Now the odds of a 25BP cut and a 50BP cut are evenly split.
1. Nick Timiraos, a journalist known as the "Federal Reserve mouthpiece," published an article discussing the possibility of a 25 basis point and 50 basis point cut, indicating that a 50 basis point cut is still within the Fed's consideration.
2. Financial Times: Following closely, the Financial Times also published a similar article, citing former Fed officials and discussing the reasons for the two rate cuts.
3. Views of former Fed officials: Dudley, former New York Fed president, said there are good reasons for a 50 basis point cut.
It is not enough to focus on the magnitude of the first rate cut at present, and a deeper understanding of the Fed's policy trends is needed. The upcoming rate cut cycle may be very different from previous rate hike cycles, and future market changes may exceed expectations.
The market is currently highly uncertain about the Fed's final decision. It is expected that more information may be disclosed through the media before the Fed meeting next Wednesday.
If the Fed decides to cut interest rates by 50 basis points, more information will be conveyed through the media to reduce market panic; if it decides to cut interest rates by 25 basis points, less information may be disclosed to avoid market disappointment.