By: Kathryn Rooney Vera, Managing Director and Chief Market Strategist
Overview: The Fed appears set to deliver a “hawkish cut” at its policy meeting this week, meaning it will cut its benchmark interest rate a third straight time by a quarter percentage point, to roughly 3.625%, but signal that the bar to additional cuts is rising.
While there is some non-trivial chance that Fed Chairman Jerome Powell will fail to muster the votes needed to cut rates, such a scenario seems unlikely. The pertinent questions are thus:
What Will a Hawkish Cut Look Like? Expect changes to the post-meeting policy statement and Chair Powell’s press conference guidance. The statement will likely be recrafted to win over officials reluctant to move at this time. This could include: a) a more balanced assessment of risks, b) an acknowledgment that the government shutdown has elevated uncertainty about the balance of risks, c) an expression of patience or caution about further adjustments in the Fed’s rate, d) possibly, an acknowledgement that policy, with a 3.625% policy rate, is closer to neutral than it has been in some time, e) possibly, an assertion that the current stance of policy is appropriate given the balance of known risks...
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The subsidiaries of StoneX Group Inc. provide financial products and services, including, but not limited to, physical commodities, securities, clearing, global payments, risk management, asset management, foreign exchange, and exchange-traded and over-the-counter derivatives. These financial products and services are offered in accordance with the applicable laws in the jurisdictions in which they are provided and are subject to specific terms, conditions, and restrictions contained in the terms of business applicable to each such offering. Not all products and services are available in all countries. The products and services offered by the StoneX Group of companies involve risk of loss and may not be suitable for all investors. Full Disclaimer. This content is not intended for residents of any particular country, and the information herein is not advice nor a recommendation to trade nor does it constitute an offer or solicitation to buy or sell any financial product or service, by any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation. Please refer to the Regulatory Disclosure section for entity-specific disclosures. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of StoneX Group Inc. The information herein is provided for informational purposes only. This information is provided on an ‘as-is’ basis and may contain statements and opinions of the StoneX Group of companies as well as excerpts and/or information from public sources and third parties and no warranty, whether express or implied, is given as to its completeness or accuracy. Each company within the StoneX Group of companies (on its own behalf and on behalf of its directors, employees and agents) disclaims any and all liability as well as any third-party claim that may arise from the accuracy and/or completeness of the information detailed herein, as well as the use of or reliance on this information by the recipient, any member of its group or any third party.
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