An interesting snippet from Deutsche Bank, expecting 25bp rate cuts ahead, but read on for the “however”.
DB say that while Friday’s … payrolls report was disappointing:
the data
did not rise to the “significant deterioration” Waller noted was needed
for larger (50bp) rate cuts. So our economists keep to their
expectations for a 25bps cut next week
And then add:
The
risk for the Fed is if and when job losses actually arrive in the
payrolls report, you tend to get little warningWith hiring now relatively soft it wouldn’t take much
for the Fed to be behind the curve and a string of 50bp cuts to follow.
With markets now pricing in over 250bps of cuts by January 2026 there
has to be a reasonably high market expectation in the fixed income space
of this policy error occurring
This article was written by Eamonn Sheridan at www.forexlive.com.
