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2d ago

Standard Chartered Calls 50-Point Fed Cut This Week, Defying Market Odds

Cooling inflation, softer hiring plus slower spending underpin its call for the first reduction since December.

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The Federal Reserve is widely expected to reduce rates for the first time this year. Photo: Reuters

Overview

  • Standard Chartered predicts the Federal Reserve will lower its benchmark rate by 50 basis points at the Sept. 17 FOMC meeting.
  • The forecast would take the federal funds target range to 3.75% to 4.00%, according to the bank.
  • CME Group’s FedWatch shows roughly 96% market odds for a 25-basis-point cut and about 4% for a 50-basis-point move.
  • The bank bases its view on recent weakness in employment, softer consumption and easing inflation readings.
  • It also expects the move to start a multi-meeting easing cycle into next year and to bolster investor sentiment in Hong Kong and other markets.