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FOMC: Preview of policy meeting
Tue, Sep 16 2008, 07:54 GMT
by Peter Possing Andersen, Signe Roed-Frederiksen
Overview: Tonight at 20:15 CET the Federal Open Market Committee (FOMC) is set to announce its policy rate decision. Following this weekend's events the market is discounting a 68% probability of a 25bp cut in the Fed funds rate or alternatively a 34% probability of a 50bp rate cut at tonight's meeting. While we attach a positive probability to a rate cut our base scenario remains that the FOMC will leave the Fed funds rate unchanged at 2%. However, the case for an emergency rate cut could emerge over the coming days if systemic risks increase further. In that case we would expect the Fed to cut rates by 50bp. While there is widespread disagreement among Fed members and within the committee itself, we are looking for a slightly more dovish statement. With the market currently discounting a 68% probability of a rate cut, we believe risks are skewed in favour of higher bond yields following the meeting.
Published on Tue, Sep 16 2008, 07:56 GMT
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- FOMC: Preview of policy meeting
Published On Tue, Oct 28 2008, 09:44 GMT - FOMC: Preview of policy meeting
Published On Tue, Sep 16 2008, 07:56 GMT
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