Where is the bar for the Fed's 50bps rate cut?
Investing.com -- As investors and analysts eye the upcoming August employment report, speculation has intensified over whether the Federal Reserve might consider a significant 50 basis points rate cut this year.
According to UBS, while Powell has signaled the likelihood of more than just a single 25 bps cut, he has avoided providing a clear indication of a larger cut, using only the term"appropriate" to describe the pace and timing of future cuts.However, UBS analysts emphasize that the Fed would likely need to see"more obvious economic weakness to convince the bulk of FOMC participants a 50 bp cut is needed, and worth the signalling risk.
UBS also highlights the internal dynamics within the Federal Open Market Committee , noting that while there is support for multiple 25 bps cuts, a larger cut could face resistance.
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