Citi comments reported by Bloomberg (gated) flah the possibility of no more rate cuts from the Federal Open Market Committee (FOMC) for the rest of this year
- Citigroup Inc.’s Akshay Singal, global head of short-term interest-rate trading, told Bloomberg TV that the Fed is likely to cut rates by just 25 basis points, or even stay put, over the next few meetings. He said he doubted the Fed would have opted for a 50-basis-point cut in September if it had seen the strong jobs data before the meeting.
The Bloomberg piece collates views from several sources pointing to the potential for a pause. For example:
- "combination of US Treasury yields above 4% and a pickup in economic activity in the US have called into question the idea of the beginning of a Fed cutting cycle ... We might have had a false start last month.”
False start? What we've been hearing from Fed officials is the cut on September was 'recalibration'. Distinct from an easing. I am not sure if that is just hair-splitting but if it was a recalibration that may well argue against further near-term cuts, or at least a series of them.