Rate Decline Guaranteed as a Result of Disappointing Retail Sales By Investing.com

© Reuters.

Investing.com – The September statements released yesterday largely boosted investor sentiment that the Fed will decide a further 0.25% rate cut at its next meeting on October 30, according to data from the.

The probability of seeing the Fed lower its rates at the end of the month is currently 86.6%, down slightly from a peak at 88.7% shortly after the publication of retail sales yesterday, but up sharply against a probability barely more than 70% registered before the publication of figures.

It should be noted that China-US relations are now uncertain, after the optimism following the announcement of a partial agreement last week was tempered by several before a signature can take place, which also constitutes a reason for the Fed to lower its rates further, in the eyes of the market.

Recent comments by Fed officials suggest that they are "in agreement" with another rate cut if it is necessary.

In addition, it should be noted that over the past three or four years, the pressure exerted by the markets seems to have interfered with the Fed's decisions. In other words, the Fed has tended to agree with market expectations in most cases, and there is a good chance that this will remain the case in October.

It should be noted that if this is not the intention of the Fed, future FOMC speeches, which will provide opportunities to correct market expectations, will be critical. We will therefore remain particularly attentive to the statements of members of the Fed today and tomorrow.

Then, the blackout period that precedes each FOMC meeting will start on October 19th.

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