- Standard Chartered, JPMorgan, Morgan Stanley, and Nomura all predict a 25-basis-point rate cut by the Fed this week
- Standard Chartered expects the Fed to maintain steady rates through 2026 after this cut.
- The market is closely monitoring the Fed’s policy direction, with particular focus on its impact on asset markets like Bitcoin.
Standard Chartered has joined a growing list of financial institutions predicting a 25-basis-point rate cut by the Federal Reserve. The bank predicts a 25-basis-point rate cut at the Federal Open Market Committee (FOMC) meeting that will take place this week. Standard Chartered considers this rate decline as a measure to assist the still weak U.S. economy, which has already shown signs of insufficient growth.
Standard Chartered’s New Forecast for the Fed
In a recent Reuters report , Standard Chartered revised its outlook for the Federal Reserve’s monetary policy. The bank anticipates a 25-basis-point rate cut during this week’s Federal Open Market Committee (FOMC) meeting. Standard Chartered views the rate cut as necessary to support U.S. economic growth, which has shown signs of slowing down. The bank also stated that, after this move, it expects the Fed to keep rates steady through 2026.
However, Standard Chartered’s prediction comes with caution. The bank noted that while it sees a strong case for the rate cut, uncertainty around economic data makes the probability of the cut more likely at 60-40 rather than the expected 95-5. Recent economic reports have been sparse, making it difficult to predict the full impact of the Fed’s decisions.
Other Banks Adjust Their Forecasts
Standard Chartered’s forecast aligns with changes made by other major banks. JPMorgan, Morgan Stanley, and Nomura have all adjusted their predictions for the Fed’s meeting this week. Initially, these institutions expected the Fed to keep rates steady. However, weak data from November and statements from Federal Reserve officials led to a shift in their outlook.
For example, Nomura strategists predict a rate cut but expect a close vote within the Fed. They believe some Fed members might dissent against a 25-basis-point reduction and may advocate for a 50-basis-point cut. This reflects the uncertainty surrounding the decision and the debate among Federal Reserve officials.
What Investors Are Watching
The FOMC meeting is drawing near, and investors are giving their full attention to the Federal Reserve’s policy guidance. The new rate cut might signify the third reduction in 2025. Not only is the Fed’s intention under observation, but also the consequences it will have on different types of digital assets, such as Bitcoin.
The conclusion of the Fed’s QT process has been the cause of a relaxation in financial conditions. The mentioned relaxation could affect asset markets remarkably. On the other hand, people in the field are reminding us that the immediate impacts of the rate cut on Bitcoin are still uncertain, particularly as institutional investors are changing their position in response to the market.
Right after the positive forecast of Standard Chartered, JPMorgan, Morgan Stanley, and Nomura, the focus is on the Federal Reserve’s decision this week. Although the situation in the economy is not very clear due to the contradictory economic data, the expected cut in the interest rate is regarded as an indication of the U.S. economic growth worries that are accompanied by inflation. Close monitoring is expected from investors, especially regarding the possible changes in the asset markets like that of Bitcoin.
