BlackRock warns that a 50bp FOMC rate cut might signal worries, not confidence

BlackRock’s Jeffrey Rosenberg spoke with Bloomberg TV (gated) in response to Friday’s August jobs report. He made a cautionary note on the upcoming meeting. Rosenberg expressed concern should the Federal Reserve choose to cut the Fed Funds rate by 50bp:

• that might signal that the FOMC has worries over the state of the economy
• a 25bp rate cut, on the other hand, would signal that policymakers are taking measured, timely actions

Rosenberg’s comments come amid fevered discussion about the next Federal Reserve’s monetary policy move. The potential rate cut is being closely watched by investors and analysts, who are trying to gauge the central bank’s assessment of the current economic landscape. A significant cut could be interpreted as a response to underlying economic weaknesses, which might lead to increased market volatility.

Rosenberg’s cautionary note underscores the delicate balance the central bank must maintain in its policy decisions.

—

ICYM the report:

• Forexlive Americas FX news wrap: Non-farm payrolls soften but not enough for 50 bps

The ‘blackout’ period began on Saturday.

• Fed ‘blackout’ period begins

This article was written by Eamonn Sheridan at www.forexlive.com.