What are the reasons for the Fed to cut interest rates by 50 basis points?
1. MUFG: The Fed is expected to cut interest rates by 50 basis points in a hawkish manner, sending a signal to the market that "they are preemptive rather than behind the curve."
2. Moody's Analysis: The Fed has completed its dual mission, and the fund rate of around 5.5% is too high. The Fed has a lot of room to normalize interest rates.
3. BNP Paribas: If the Fed is worried about the risk of a hard landing of the economy, it may cut interest rates by 50 basis points, and it may also cut interest rates by 50 basis points in November.
4. "New Bond King" Gundlach: The US economy has fallen into recession and may face deflation in the future. The Fed is far behind the curve and should act quickly.
5. Ray Dalio, founder of Bridgewater Fund: If we look at the worse and more widely affected mortgage situation, the Fed may cut interest rates by 50 basis points.
6. Ariel Bezalel, co-manager of Jupiter Strategic Bond Fund: The bond market strongly demands that the Federal Reserve cut interest rates sharply, because the gap between the federal funds rate and the two-year Treasury yield is the largest in 45 years.
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