The Fed Doubles Down on Rate Cut Bet as Initial Claims Data Underscores Weak Job Market
BlockBeats News, September 11th. This Thursday, a U.S. government report showed that initial jobless claims surged to nearly a four-year high. The short-term interest rate futures market continued to increase bets on a Fed rate cut, shifting from expecting at least two rate cuts by the end of this year to betting on four consecutive rate cuts from September to January next year, and finally pricing in three rate cuts by the end of the year, indicating that the Fed will cut rates at all remaining meetings this year.
However, the August CPI growth was stronger than expected, which may prevent the Fed from significantly cutting rates. The probability of a 50 basis point rate cut by the Fed in September increased slightly from 8% before the announcement to 10.9%. (FXStreet)
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