Pulles: Expects the Fed to cut interest rates twice more this year, a total of 6 rate cuts by the end of next year

Zhitong
2024.10.09 05:56
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Steve Boothe, Managing Director of Fixed Income at PIMCO, mentioned that the market's expectations for the number of interest rate cuts are too high overall. Currently, PIMCO holds a slightly optimistic view on the overall economic situation compared to the market. There are currently no conditions present that would lead to an economic recession. Although the economic growth rate is slowing down, the overall situation remains relatively good. Therefore, it is expected that the Federal Reserve will cut interest rates twice more this year, by 25 basis points each time, for a total of 6 cuts by the end of next year. There are signs indicating that the economy may reaccelerate in the first quarter of next year, driven by factors such as the bottoming out and rebound of commodity prices, as well as potential improvements in the real estate and investment cycles. The recovery of economic activities may increase inflationary pressures. However, it is expected that the Federal Reserve will remain patient and not aggressively raise interest rates in response. Looking ahead, the U.S. presidential election will be a key event closely watched by investors. Volatility is expected during the election period as investors may seek hedging strategies. If the outcome of the U.S. election leads to a divided government, it may be the most welcomed scenario by the market

According to the information obtained by Zhitong Finance APP, Steve Boothe, the head of investment-grade bonds at PLS Investment and fund manager of the fixed income department, mentioned that the market's overall expectations for the number of interest rate cuts are too high. Currently, compared to the market, PLS holds a slightly optimistic view on the overall economic situation. There are currently no conditions leading to an economic recession, although the economic growth rate is slowing down, the overall situation is relatively good. Therefore, it is expected that the Federal Reserve will cut interest rates twice this year, by 25 basis points each time, for a total of 6 cuts by the end of next year.

There are signs indicating that the economy may reaccelerate in the first quarter of next year, driven by factors such as the bottoming out and rebound of commodity prices, as well as potential improvements in the real estate and investment cycles. The recovery of economic activities may increase inflationary pressures. However, it is expected that the Federal Reserve will remain patient and not aggressively raise interest rates in response.

Looking ahead, the U.S. presidential election will be a significant event closely watched by investors. Volatility is expected during the election period as investors may seek hedging strategies. If the outcome of the U.S. election leads to a divided government, it may be the most welcomed scenario by the market

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