Mumbai, 05 Nov (Commoditiescontrol): The Federal Reserve is expected to cut interest rates by 25 basis points in November, bringing the Fed funds target range to 4.5-4.75%. This shift reflects easing inflation concerns, as September’s inflation reached 2.4%, supporting a softer policy approach to sustain a strong labor market. The latest employment data shows resilience, with 254,000 jobs added in September and a stable 4.1% unemployment rate.
Investor optimism remains high, with the S&P 500 up 22.9% year-to-date as markets price in future rate cuts. Treasury yields are expected to stay under pressure, with projections for the 2-year yield at 3.75-4% and the 10-year yield near 4.25%. A weaker dollar may follow the rate cut, though election-related volatility could counterbalance this. Forex traders are advised to watch both economic and political developments closely.
The Fed is expected to continue rate cuts through 2024-2025, with the election outcome potentially shaping the rate floor. Market expectations suggest a target of 3.5% under Trump and around 3% under a Harris administration, signaling divergent economic priorities.
(By Commoditiescontrol Bureau: 09820130172)
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