JIN10
2024.09.18 16:28
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FXStreet: How will the Fed's decision stir up major markets?

The Federal Reserve may cut interest rates by 25 or 50 basis points, with different market reactions. YuXin Bank believes that a 25 basis point rate cut will lead to profit-taking in the Euro, but will not completely reverse. Danske Bank expects a moderate response, with the possibility of a stronger US dollar. ING warns that a 50 basis point rate cut will trigger panic. Goldman Sachs predicts that after a 25 basis point rate cut, gold will reach new highs. Overall, market expectations for the Federal Reserve's policy will impact the performance of major assets

Foreign Exchange

  1. YuXin Bank: If the Federal Reserve cuts interest rates by 25 basis points, the Euro may face some profit-taking, but this may only prevent the further weakening of the US Dollar, rather than triggering a complete reversal of the Euro.

  2. Danske Bank: If the Federal Reserve is expected to cut interest rates by 25 basis points and provide a mild forward guidance, market reactions may be relatively moderate, but the risks tend to favor a stronger US Dollar and higher short-term US Dollar yields.

  3. ING Bank: A 50 basis point rate cut by the Federal Reserve would trigger panic, causing the US Dollar to weaken and transmit through the Euro, Yen, and Swiss Franc, while high beta currencies (such as Norwegian Krone and Swedish Krona) may be impacted.

  4. ING Bank: The likelihood of a 25 basis point rate cut by the Federal Reserve is higher, which may lead to a rise in the US Dollar, but if Powell holds a dovish press conference, the US Dollar is likely to struggle to maintain its upward momentum in the short term.

  5. Stock broker StoneX: A 25 basis point rate cut may cause a knee-jerk rally in the US Dollar, with USD/JPY potentially returning above the key level of 142.00; a 50 basis point cut may push the currency pair towards the psychological level of 140.

Gold

  1. Goldman Sachs: If the Federal Reserve chooses to cut interest rates by 25 basis points this week, gold may face a slight pullback in the short term, but will subsequently hit record highs driven by inflows into gold ETFs.

  2. Stock broker AngelOne: There is a risk of overly dovish pricing in the market, the Federal Reserve is unlikely to cut rates by 50 basis points, which could lead to higher US bond yields and a stronger US Dollar, further pressuring gold prices.

Others

  1. Global macro hedge fund NWI Management: As the US stock market nears historical highs, and may have already reflected a deep easing cycle by the Federal Reserve, the outlook for further gains does not look optimistic.

  2. Angeles Investments: The bond market has priced in the Federal Reserve's rate cut pace too aggressively, therefore the decline in short-term US bond yields will be lower than market expectations, and long-term yields may even start to rise from current levels.

  3. Hedge fund mogul Scaramucci: The Federal Reserve is expected to make a significant 50 basis point cut, with a series of rate cuts by the Federal Reserve and clearer regulation of cryptocurrencies in the US driving Bitcoin to hit a new all-time high of $100,000 by the end of the year