That was enough to get markets going with traders and investors taking that as a sign of a more dovish tilt going into September. Fed funds futures now seen ~84% odds of a 25 bps rate cut for next month. And basically, markets will look to the non-farm payrolls release on 5 September to confirm such a move.
So, what can we expect next from the Fed and market developments?
And a continuation of softer data will certainly reinforce that argument.
In that case, there's only one of two things that could play out next. One, that markets choose to conveniently ignore the data and reaffirm that it just means a soft landing scenario is still well intact. In that case, the Fed need not rush to cut rates but may still choose to kick things off in September. The question is, will markets try to bully the Fed into a decision then?
And that's pretty much how the other side of the coin could play out. That even with Powell's comments here, he hasn't exactly fully committed or pre-commit to a rate cut in September. All he has done is leave the door open.
As such, the Fed might not get their reaction function right at the end of the day but perhaps it might not matter too much. That unless the bond market throws up a fuss by kicking and screaming until the central bank listens.
This article was written by Justin Low at investinglive.com.Hence then, the article about powell keeps the door open but what can we expect next was published today ( ) and is available on forex live ( Middle East ) The editorial team at PressBee has edited and verified it, and it may have been modified, fully republished, or quoted. You can read and follow the updates of this news or article from its original source.
Read More Details
Finally We wish PressBee provided you with enough information of ( Powell keeps the door open but what can we expect next? )
Also on site :