Institutional Report: The Fed's Dot Plot May Test Market's Optimistic Rate Cut Sentiment

ChainCatcher news, Elmar Voelker, a senior fixed income analyst at Landesbank Baden-Württemberg (LBBW), said in a report that the new interest rate expectations, or dot plot, to be released by the Federal Reserve at next week's meeting are unlikely to align with the currently warming expectations for rate cuts. He stated, "Whether the forecast adjustments can keep pace with market expectations seems at least questionable." The same goes for the 2025 forecast.

Voelker noted that the dot plot could become a "potential stumbling block for rising bond prices." The market speculates that the Federal Reserve may cut rates significantly by 50 basis points next week, but the bank's recent forecast only suggests a rate cut of 25 basis points this year. (Jin Shi)