Markets Confident That Rate Cuts Will Start in September: Is This Time the Charm?

Market Overview Analysis by James Picerno covering: United States 2-Year. Read James Picerno's latest article on Investing.com

We’ve been here before. Markets price in high odds that the Federal Reserve will soon start cutting interest rates only to learn otherwise. Is this time different? That’s the bet again.

Meanwhile, a Fed funds model I developed for TMC Research also points to a lower target rate. Using data through July 8, this model estimated the optimal target rate at roughly 4.75%, which suggests a 50-basis-point cut is optimal. If correct, the weak retail data will provide more evidence that the recent slowdown in consumer spending continues, which in turn will support the crowd’s view that a rate cut is on the near-term horizon.Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors.

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