State Street Global: The Federal Reserve may cut interest rates by 50 basis points in June

ChainCatcher news, State Street Global Advisors diverges from the increasingly hawkish consensus in the recent market, betting that the Federal Reserve will cut interest rates by 50 basis points as early as June.

The institution, which manages $3.6 trillion in assets, believes that the Federal Reserve will lower rates before the November U.S. presidential election. By the end of this year, the company expects the Fed to have cut rates by a total of 150 basis points, which is 2.5 times the current market pricing.

A series of strong U.S. economic data, including last Friday's better-than-expected U.S. non-farm payroll report, along with comments from hawkish officials suggesting that the Fed may not need to cut rates at all, have driven a repricing of market expectations for easing and pushed U.S. Treasury yields to a four-month high.

However, State Street Global still maintains that the U.S. economy is not as strong as it appears on the surface, with indicators such as credit card default rates and small business credit costs suggesting that the economy may face a downturn later this year.