The market is overly optimistic about interest rate cuts, and this year may ultimately see a reduction of only 50 basis points

ChainCatcher message, analysts indicate that the FOMC's July meeting minutes are overly dovish, clearly stating that the Federal Reserve will cut interest rates in September, which is also the most information Powell could reveal during his speech at Jackson Hole on Friday.

This will lead traders to be (overly) optimistic, believing that there will be four rate cuts before the end of the year, while the Federal Reserve may only cut rates two to three times. We can see that the swap market is pricing in about 95 basis points of rate cuts by the Federal Reserve before December, suggesting that the Fed will cut rates at each of its remaining three meetings this year, with one of those cuts being substantial. However, if you pay attention to the discussions among Federal Reserve officials, you will find that this is an extremely optimistic view. The Federal Reserve is more likely to skip the November meeting to achieve consensus on rate cuts, so the total cuts this year may ultimately only amount to 50 basis points. (Jin Ten)