UBS says a Fed rate cut is ‘long overdue’, but a 50bp cut might be taken as panic

UBS make the case that a Fed rate cut is anticipated, and has been for some time, given the ongoing decline in inflation pressures in the US.

However, say analysts at the bank, a reduction of more than 25 basis points appears unlikely.

Although the Fed is behind the curve in lowering rates, a more substantial cut could be perceived as a reactionary move.

UBS conclude therefore that its more probable that we will see smaller, more frequent rate cuts rather than a larger one to kick off the cycle.

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The times to watch on Tuesday, September 17, 2024:

These are GMT.

US Eastern time are 1400 and 1430.

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