Bret Kenwell, eToro’s U.S. investment analyst, thinks a September rate cut is “all but certain.”
“With a ‘vast majority’ of members viewing a September rate cut as appropriate before the disappointing monthly jobs report, it seems all but certain that the Fed will cut next month amid cooling inflation and softening labor data,” Kenwell wrote in a note.
With the Fed minutes making a September cut seem more likely, investors are still speculating about the size of the cut.
“The market is currently pricing in greater odds of a 25-basis-point cut rather than a 50-basis-point cut, which seems like the more likely outcome at this point, provided the August jobs report isn’t a drastic disappointment,” Kenwell said.
Investors will likely pay close attention to Fed Chair Jerome Powell’s speech at the Jackson Hole Economic Symposium on Friday to glean more information.
