September 18, 2024
United States:
Traders Lock In Fed Bets as Rate-Cut Size Debate to Finally End
Bond investors that have been frantically wagering on the size of the Federal Reserve’s first interest-rate cut in four years are about to find out whether they made the right trade.
The market is fully pricing in a quarter-point rate reduction on Wednesday, when the US central bank is expected to kick off its rate-cutting cycle, with the chance of a bigger move viewed as a coin-flip. Treasuries have rallied into the decision, climbing for a fifth-straight month and driving short-dated yields — those most sensitive to Fed policy — to their lowest in two years.
Europe:
ECB Must Remain Patient to Fully Reach 2% Price Goal, Nagel Says
The European Central Bank has made good progress in bringing inflation down, but needs patience to fully reach the 2% target, Governing Council member Joachim Nagel said.
“We must now show staying power,” the Bundesbank president said Wednesday. “If we can do that, then we’ll soon make it to the finish line on our run.”
Asia:
China’s Central Bank Delays One-Year Loan Operation Again
China’s central bank announced it will inject one-year liquidity to domestic lenders on Sept. 25, marking another delay amid a broad overhaul of its policy toolkit.
The People’s Bank of China will renew the medium-term lending facility funds maturing Sept. 18 later this month, according to a statement Wednesday. It postponed the operations in August to around the 25th from its previous practice of around mid-month. In July, the central bank announced an MLF rate cut toward the end of the month.
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