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2025-09-15 17:41:05
[Global Focus on Central Bank Week, Markets Closely Watch for Rate Cuts] ⑴ Global stock markets stabilized at the start of the week, trading near record highs, with European stocks rising modestly by 0.3%. Markets generally expect the US Federal Reserve (Fed) to resume its rate-cutting cycle, with the Bank of Canada also likely to cut by 25 basis points this week, while the Bank of Japan and the Bank of England are expected to maintain rates. The market is currently 100% priced in a 25 basis point cut from the Fed, pushing the federal funds rate to a range of 4.0-4.25%, with only a 4% probability of a 50 basis point cut. ⑵ Investors are closely watching Fed members' interest rate dot plot projections and Fed Chairman Powell's guidance on the magnitude and pace of future rate cuts. As of now, the futures market has priced in a cumulative 125 basis points of rate cuts by the end of 2026. Analysts point out that a less-than-expected dovish Fed tone could disappoint investors. Furthermore, concerns about inflation fueled by Trump's tariff rhetoric may hinder the continued decline in US Treasury yields.
