Xinan Asset Management: History shows that the likelihood of the Federal Reserve cutting interest rates by 25 basis points is greater
ChainCatcher news, according to Jinshi reports, the Chief Global Strategist of Xinan Asset Management, Sima Sha, stated in a report that while some may believe the Federal Reserve will cut rates by 50 basis points this week, history suggests that a 25 basis point cut is more likely. "Since the late 1980s... a 25 basis point cut has become the norm, while a 50 basis point cut is the exception."She noted that only twice has the initial cut in a rate-cutting cycle exceeded 25 basis points: in January 2001 during the dot-com bubble, and in September 2007 during the subprime mortgage crisis. Both periods were marked by significant concerns over severe asset price bubbles and systemic financial risks.