the global view: the case for a 25bp rate cut 17.09.24

Key points:
Bill Dudley's advocacy for 50 basis points rate cuts.
Market's anticipation of Federal Reserve's decision.
Political influences on Federal Reserve's monetary policies.
Steve Sosnick of Interactive Brokers comments on Bill Dudley's advocacy for significant rate cuts. Steve notes Dudley's influential past with the New York Fed, despite questions on his current impact. He points out the growing expectation for a 50 basis point cut after a key Wall Street Journal article.
Steve highlights the uncertainty surrounding the Federal Reserve's rate cut decision, emphasising potential market surprises regardless of whether a 25 or 50 basis point cut is implemented. Investors face a lack of consensus, adding unpredictability to financial markets.
Touching on political influences, Steve reflects on the Federal Reserve's alleged independence amidst political pressures. The market is eyeing extensive rate cuts by the end of 2025. Steve remains cautious, anticipating the Federal Reserve's upcoming decisions and their implications on the market's trajectory.
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