On September 17, Jinshi Data reported that DBS Bank said that the market expects the Federal Reserve to carry out a series of interest rate cuts, but aggressive market pricing may lead to disappointment and ultimately panic. Economist Taimur Baig wrote in a report: 'Inflation rates below 3% and policy interest rates above 5% are often difficult to coexist, so it is necessary to implement some monetary easing policies. However, the magnitude of interest rate cuts reflected by the market seems to be too large. In order for the yield curve to reflect a reduction of more than 200 basis points in the next 16 months, the US economy must significantly weaken and inflation must fall below 2%, which is unlikely to happen.' DBS Bank's basic view is that by the end of 2025, the Federal Reserve will cut interest rates by 150 basis points, and this week it will cut interest rates by 25 basis points.
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DBS Bank: Disappointment with aggressive rate cuts by the Federal Reserve may lead to panic
On September 17, Jinshi Data reported that DBS Bank said that the market expects the Federal Reserve to carry out a series of interest rate cuts, but aggressive market pricing may lead to disappointment and ultimately panic. Economist Taimur Baig wrote in a report: 'Inflation rates below 3% and policy interest rates above 5% are often difficult to coexist, so it is necessary to implement some monetary easing policies. However, the magnitude of interest rate cuts reflected by the market seems to be too large. In order for the yield curve to reflect a reduction of more than 200 basis points in the next 16 months, the US economy must significantly weaken and inflation must fall below 2%, which is unlikely to happen.' DBS Bank's basic view is that by the end of 2025, the Federal Reserve will cut interest rates by 150 basis points, and this week it will cut interest rates by 25 basis points.