In recent weeks, investors have been confident that the US central bank, the Fed, will lower its key interest rates at its meeting ending on September 18. Inflation has finally given in enough and now investors are already somewhat afraid of a recession. The market has expected an interest rate cut of 0.25 percent, but due to the slowdown in the labor market, the probabilities of a larger 0.50 percent interest rate cut have increased.
The dismal July employment report published at the beginning of August spooked investors into thinking whether the interest rate cuts will be late. The August report, published at the beginning of September, was a little stronger, but still reinforced expectations about the need to ease monetary policy.
The US central bank last lowered its key interest rate at the time of the corona shock in March 2020. The interest rate hike streak that started in 2022 ended in August last year.
Source: www.arvopaperi.fi
