Fed preview: 25 bp cut and dovish guidance – ANZ

The ANZ bank isn’t left behind in forecasting the outcome of this week’s Federal Open Market Committee (FOMC) meeting. Analysts at the bank expect a 25 basis point (bp) cut into the Fed rate together with an end to the US central bank’s quantitative easing.

Key quotes

• The Federal Open Market Committee (FOMC) is expected to ease rates this week. We expect the central bank to cut its target rates by 25bps. We also expect an end to quantitative tightening.
• Ongoing elevated uncertainty and weak domestic inflation mean that the FOMC will keep its easing bias.
• We expect the FOMC to ease again at least once more, possibly October. At this stage, we are not expecting any further easing but the bias remains in that direction given that external risks remain elevated and inflation weak.