Market Predicts the Fed to Cut Interest Rates Significantly in the Short Term
Publication Time:2024-09-04 12:06:08
According to Jinse Finance Report, market sentiment has shown a positive reaction to the Fed's policies recently, reflecting optimistic expectations for future interest rate trends. Since late April this year, the two-year USTreasury bond yield has experienced a continuous four-month rise, setting the longest consecutive increase record since 2021. The key factor behind this is that investors generally expect the Fed to significantly reduce the benchmark interest rate within the next 12 months, with an expected reduction of more than 2 percentage points. This expectation will lower interest rates to historically low levels, excluding economic recession periods, since the 1980s. For investors who are bullish on the bond market, this expectation presents challenges, especially after the resilience shown by the US labor market in July. Market attention is now focused on the August non-farm payrolls data to be released this Friday, which is expected to show a rebound in employment growth and a decline in unemployment rate. If the data confirms market expectations, it could impact the Fed's future path of interest rate cuts, thus affecting interest rate expectations and investment strategies across the market.
Fed
Benchmark Interest Rate
USTreasury Bonds
Economic Cycle