Fidelity: Soft landing remains likely after Fed rate cut

Fidelity: Soft landing remains likely after Fed rate cut

September 19, 2024

Interest Rates Fed
Omlaag Downstairs, Roltrap Escalator (Pexels, Brixiv)

Salman Ahmed, Global Head of Macro & Strategic Asset Allocation ay Fidelity International, responds to the Fed's interest rate decision.

'This was a hotly contested meeting with markets split between a 25 versus 50 basis point start to the cutting cycle. The Fed went big with a 50-basis point cut. Certainly, the labour market has cooled over the last few months as inflation has continued to subside. The cut appears to be pre-emptive one with both accompanying dot plot and press conference comments highlighting more caution when it comes to the pace and magnitude of easing policy going forward.

All in all, it’s a somewhat hawkish 50 basis point cut. One thing is certain though, doves rule the FOMC and any further weakness to the labour market would bring more and faster cuts and now the markets know that. We maintain our view that soft landing remains the most likely outcome for this year.'

Related posts