REPORT: Fed Expected to Confirm Market Expectations for September Rate Cut
Derek Halpenny, head of research at Mitsubishi UFJ Financial Group, said in a report that the Fed's communication at Wednesday's policy meeting will be important not only in terms of the reaction to bond yields, but also in terms of the reaction to overall market conditions. In the case of increased risk aversion in the market and market expectations that the Fed will cut rates by 25 basis points at its September meeting, Fed Chairman Jerome Powell will need to provide some communication that suggests the FOMC has moved in the direction of a rate cut in September. Mitsubishi UFJ Financial Group expects Powell to deliver on this promise and it would be a big mistake for him to surprise with hawkish communication.
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