Rate cut on the cards

  • Fed likely to keep rates on hold
  • Chance of hike in 2019 is pretty much zero
  • Rate cut this year becoming much more likely

The Fed is likely to keep rates on hold today as some headwinds to global and US growth still remain.

Although there had been good NFP data of late, it is unlikely that this will have been real reason for the FOMC to turn too hawkish.

China, Brexit and European issues are still weighing, and the Fed are likely to be anxious with regards to any possible deleveraging that could happen through being too hawkish.

What’s more is that there is more and more pressure from the White House with regards to not raising rates.

US 10 year is trending downwards and the entire yield curve is inverted – this should be a recessionary indicator and it would be counter-intuitive for a Fed cut to occur as this would signify actual belief of recession, where data doesn’t point to recession.