The Fed is widely expected to resume cutting interest rates, with markets pricing in a 25 basis-point rate reduction, LSEG data show. However, a larger 50 basis-point reduction looks unlikely and Danske Bank analysts said they expect “a more gradual rate-cutting cycle rather than back-to-back cuts.”
They cited Friday’s University of Michigan’s consumer confidence survey for September, which showed one-year inflation expectations remained elevated at 4.8% while five-year expectations rose to 3.9% from 3.5% in August.