ICYMI, Justin ahd the headline on this Thursday:
Adding in a little more now: from the GS note. Analsyst at the bank argue that the main reason for the larger rate cut, and the key takeaway from the meeting, was the shift in focus from inflation concerns to employment risks, due to recent signs of weakness in the labor market. And thus a longer sequence of consecutive 25-basis-point cuts is expected from November 2024 through June 2025, compared to the previous forecast, which anticipated consecutive cuts this year and quarterly cuts next year. The Fed’s terminal rate is projected to be between 3.25% and 3.5% by June 2025.
GS add on Fed Chair Powell, heclarified that the 50-basis-point rate cut pace shouldn’t be seen as the new standard. The key factor for future decisions will likely be the next two employment reports.