{"id":16954,"date":"2024-09-13T17:56:14","date_gmt":"2024-09-13T14:56:14","guid":{"rendered":"https:\/\/forklog.com\/en\/economist-predicts-sell-the-news-scenario-following-fed-meeting\/"},"modified":"2024-09-13T17:56:14","modified_gmt":"2024-09-13T14:56:14","slug":"economist-predicts-sell-the-news-scenario-following-fed-meeting","status":"publish","type":"post","link":"https:\/\/u1f987.com\/en\/economist-predicts-sell-the-news-scenario-following-fed-meeting\/","title":{"rendered":"Economist Predicts ‘Sell the News’ Scenario Following Fed Meeting"},"content":{"rendered":"

The potential 25 basis point rate cut by the Fed<\/span> during the September 18 meeting is already priced in by the market and may lead to a ‘sell the news’ reaction in risk assets. This was stated by Johns Hopkins University economist Steve Hanke in a conversation with The Block<\/a>.<\/p>\n

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“The market already expects a [25 basis point] cut, which means the actual reduction might be disappointing and trigger a sell-off. Conversely, a 50 basis point cut is not anticipated. If it were to occur, it would likely lift the market,” he noted.\u00a0<\/p>\n<\/blockquote>\n

As the Fed meeting approaches, traders have become more optimistic about a 50 basis point cut. According to CME FedWatch<\/a>, 47% believe in such an outcome, although on September 12, the figure did not exceed 28%.\u00a0<\/p>\n

\"Economist
Data: CMEGroup.<\/figcaption><\/figure>\n

Hanke also added that in the coming months, Bitcoin and other risk assets will face increased volatility ahead of the US elections. Given market uncertainty, he prefers fixed-income investments such as ten-year Treasury bonds and gold.<\/p>\n

According to 21Shares Research analyst Lina ElDib, a more substantial rate cut could potentially have a significant impact on crypto assets. However, it would also cause caution among investors, as the Fed’s actions might signal a recession.\u00a0\u00a0<\/p>\n

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“A more aggressive rate cut risks shocking the markets, as it would signal a recession warning. Investors will trade cautiously to withstand market conditions that could cause short-term damage,” ElDib clarified.\u00a0<\/p>\n<\/blockquote>\n

Former New York Fed President Bill Dudley stated that there are strong grounds for a 50 basis point cut. In his observation, the current rate is 150-200 points above the so-called neutral rate<\/a>.\u00a0<\/p>\n

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“So the question is: why not just start?” the former official pondered.\u00a0<\/p>\n<\/blockquote>\n

As of August, annual inflation in the US stood at 2.5%<\/a> compared to 2.9% the previous month. The consumer price index rose by 0.2%, as it did in July.<\/p>\n

However, the report was overshadowed, as always, by details: prices for services excluding housing and energy rose again, and the rent index increased by a maximum of 0.49% since January.<\/p>\n

According to Bitwise, in October-November, the digital asset market will shift to growth due to the end of macroeconomic and political uncertainty in the US.<\/p>\n

Earlier, Standard Chartered concluded that Bitcoin could reach a new high by the end of the year, regardless of the outcome of the US presidential elections.<\/p>\n","protected":false},"excerpt":{"rendered":"

The potential 25 basis point rate cut by the Fed during the September 18 meeting is already priced in by the market and may lead to a ‘sell the news’ reaction in risk assets. This was stated by Johns Hopkins University economist Steve Hanke in a conversation with The Block. “The market already expects a […]<\/p>\n","protected":false},"author":1,"featured_media":16953,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"","news_style_id":"","cryptorium_level":"","_short_excerpt_text":"","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[3],"tags":[1249,1224,1138],"class_list":["post-16954","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-analysis","tag-federal-reserve-system","tag-macroeconomics","tag-opinions"],"aioseo_notices":[],"amp_enabled":true,"views":"48","promo_type":"","layout_type":"","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/16954","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/comments?post=16954"}],"version-history":[{"count":0,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/16954\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/media\/16953"}],"wp:attachment":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/media?parent=16954"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/categories?post=16954"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/tags?post=16954"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}