The OCBC duo are keeping their estimate of a 125 bps cut in 2025. “These expected rate cuts, if materialised, will bring the target range for the Federal funds rate to 3%–3.25% by end-2025.”
Following the US Federal Reserve’s 50 basis points (bps) rate cut on Sept 18, announced during its Federal Open Market Committee (FOMC) meeting, pundits, economists, strategists and everybody in between have weighed in on the outlook for the global economy, stocks, bonds and everything else.
First off, where are interest rates heading? In a word, the answer is down. In a Sept 19 note, Selena Ling, OCBC’s chief economist and head of global markets research & strategy; and Frances Cheung, head of foreign exchange (FX) and rates strategy, say they expect to see another 50bps of cuts, with 25 bps each at the remaining two meetings this year. They are on Nov 6–7 and Dec 17–18.
