The Fed might be signaling that they intend to cut by just 25 bps each in November and December. However, they’ve shown this week that they can be bullied into a decision by markets. The onus now lies on economic data in the weeks ahead to vindicate the Fed’s outlook.
So, if we are to see worse data especially in the labour market, that could potentially trigger market players to start thinking they can bully the Fed into another 50 bps rate cut the next time around.
That will be something to be mindful about as a potential risk for the dollar and broader markets in general.
This article was written by Justin Low at www.forexlive.com.
