Major positive news, the Fed cuts interest rates, and cryptocurrencies are rising.
JPMorgan Chase: The Fed hints that it will be more cautious about the easing cycle
Kerry Craig, global market strategist at JPMorgan Asset Management, said in a report that the Fed has signaled that it will take a more cautious approach to the easing cycle. Craig said Powell communicated well by balancing the "urgency of returning to a neutral interest rate" and acknowledging a "relatively stable economic state."
Craig added that the focus has also shifted more to an employment-first approach rather than inflation. The size of the rate cut may not be as important as the ultimate goal, which is to adjust the policy rate to a closer view of the Fed's neutrality by 2026 through an expected 150 basis point rate cut by the end of 2025. Craig said that if nominal growth and the easing cycle remain stable, stocks and bonds should benefit.
UBS: Fed's sharp rate cut will prompt the RBA to ease monetary policy earlier
UBS has brought forward its forecast for the first rate cut by the RBA to February from May next year, and said the downward effect of the Fed's consistent rate cuts over the next year will also give the RBA room to ease.
UBS chief economist George Tharenou said Australian interest rates will remain higher for longer, at least relative to global trends.
Global trends are becoming increasingly dovish. UBS currently expects lower terminal rates in the United States and a rapid drop in the federal funds rate to levels well below the RBA's official cash rate. He said these factors mean the RBA may start easing monetary policy earlier.
Morgan Stanley: Bank of England policy rhetoric may see dovish fine-tuning
Morgan Stanley expects the Bank of England to vote 6:3 in favor of unchanged interest rates. But the policy rhetoric may see a dovish adjustment, suggesting that action may be taken in November. "Given all the data since August and the scale of existing restrictions, we think the market should price a slightly higher rate cut in September. But even so, we think the probability of a rate cut is no more than 30%."
