Analyst: The Fed's threshold for a 50 basis point rate cut next week is high, and the drawbacks of a steep cut outweigh the benefits

BlockBeats News, September 10th, InTouch Capital Markets' Asia Rates Strategist Kieran Williams said: "The threshold for a 50 basis point rate cut is high, and it may require core inflation to unexpectedly and significantly undershoot expectations to provide confidence to doves. Considering the stickiness of service prices and the Fed's tendency to signal gradualism, a significant rate cut next week seems unlikely, but data will influence the market's enthusiasm for pricing in an accommodative path by year-end."

City Index's Senior Market Analyst Matt Simpson also stated: "I believe that a 50 basis point rate cut at this point would do more harm than good to market confidence. Additionally, the Fed may want to save face and not entirely bow to Trump's will." Simpson pointed out, "Current market pricing reflects expectations for three more rate cuts in the future three meetings, the Fed is in a good position to either accommodate these expectations well or increase the likelihood of a rate cut in 2026 without being forced to cut rates by 50 basis points next week."