The Macro Trading Floor Will The Fed Cut by 25 or 50 bps?
4 snips
Sep 6, 2024 Alf and Brent dive into the speculative whirlpool of potential Fed rate cuts, debating if a 25 or 50 basis point drop is on the horizon. They analyze key economic indicators and the impact on the bond market amid shifting market perceptions. The discussion shifts to China’s unique economic deleveraging and its ripple effects on global commodities. Traders are cautioned about long-term biases that may skew short-term strategies, while reflections on payrolls set the stage for exciting resource announcements.
AI Snips
Chapters
Books
Transcript
Episode notes
Market Uncertainty on Fed Decision
- The rates market is pricing in 34.5 basis points for the September Fed meeting.
- This indicates uncertainty about a 25 or 50 basis point cut.
Arguments for and against 50bps cut
- Arguments for a 50 bps cut include no October meeting, the November election, and already restrictive rates.
- Arguments for 25 bps involve the lack of emergency or de-anchoring, and potential inflation reignition.
Peccatillo's 50bps Prediction
- Alfonso Peccatillo predicts a 50 bps cut, viewing it as catching up from July.
- He cites Powell's concern about labor market cooling and various indicators suggesting weakness.
