Today, world markets are keenly awaiting the outcome of the all-important Federal Open Market Committee (FOMC) monetary policy decision for the month of October, which will be announced at 1800 GMT. As we move towards the decision timings, here is a sneak preview of the expectations of the economists and researchers of 11 major banks regarding the outcome of the meeting.

The consensus amongst most economists and analysts suggest that the Fed will deliver its third consecutive cut since July of 25bps.

Danske Bank

Danske Bank analysts expect the Federal Reserve will cut rates again by 25bps.

“While economists are evenly divided between those expecting a cut and those expecting the Fed to remain on hold, investors have nearly fully priced in a cut (90% probability, according to Bloomberg).”

“It is one of the interim meetings so the Fed will not publish updated projections (hence, no new dot plot). Focus will be on the statement and the press conference following. We do not expect major changes to the statement but it was interesting that the FOMC members discussed whether to include some forward guidance on when to expect the Fed to end rate cuts for insurance reasons. We expect the Fed to keep the sentence that it "will act as appropriate to sustain the expansion ", i.e. easing bias without pre-commitment.”

“A 25bp rate cut is currently priced in with more than 90% probability. Given that we expect the easing bias to be maintained, but without a pre-commitment to further reductions, the impact on the US treasury market should be limited.”

TD Securities

“We expect the Fed to cut rates by 25bp, delivering the third consecutive cut since July,” TD Securities analysts said previewing Wednesday Federal Open Market Committee (FOMC) meeting.

“The FOMC should communicate patience in deciding future policy moves as they assess the impact of the three cuts they have already delivered. We look for the Fed to temporarily pause before resuming rate cuts in Q1 2020.”

Deutsche Bank

“A 25bp cut is all but priced in but the bigger focal point for markets is what message the Fed wants to send.”

“With incoming data since the September FOMC meeting generally underperforming expectations, revisions to the statement language about recent developments should skew in a slightly dovish direction. In terms of forward guidance, the statement should retain the Committee's commitment to "act as appropriate to sustain the expansion". Ultimately the team believe that it is too early for the FOMC to communicate the end of the cutting cycle given where risks lie, the recent data and the leading indicators signaling a further slowdown ahead.”

“One point they do make though is that the Chair could implicitly raise the bar for further cuts as they await the outcome of a few event risks related to trade policy and take time to assess incoming data. In effect, the threshold for cutting could change from not seeing an improvement in the data – which is how we interpreted the guidance from the past several meetings – to needing to see some further deterioration. This could be communicated by emphasising the magnitude of easing to date and the long lags in monetary policy or by providing a more positive assessment of the distribution of risks around the outlook, among other possibilities. We’ll get the decision at 6pm GMT followed shortly by Powell’s press conference shortly after.”


“We expect the Fed to cut the target range for the federal funds rate by 25 bps on October 30.”

“The Fed may also indicate that it thinks the mid-cycle adjustment has come to an end.”

“However, we expect a recession in 2020 that will force the Fed to cut rates all the way to zero before the end of 2020.”

National Bank Financial

“In the U.S., the main event will be the central bank’s monetary policy meeting. In line with market expectations, we expect the Fed to lower benchmark rates, highlighting heightened uncertainties and slowing global growth as factors justifying its decision.”

Nordea Markets

“We expect the Fed to cut for a third consecutive time at next week’s FOMC meeting. When re-assessing the three reasons the FOMC gave in July and September for cutting rates – i) signs of deceleration in economic activity, ii) prudency from a risk-management perspective and iii) the inflation outlook – we think a rate cut is warranted.”

“Overall, we think there should be little doubt that the Fed will cut again next week even though the Bloomberg consensus a bit surprisingly, in our view, roughly indicates a 50/50 spit between economist projecting a cut and being on hold.”

“In contrast to the September meeting, we do not expect the Fed to cut its two other key rates - the interest on excess reserves (IOER) and the overnight reverse repo rate (RRP) - by morethan 25 bp (both were cut by 30 bp in September).”

“The Fed will most likely again be divided in its decision to cut rates by 25 bp. We expect both George and Rosengren to dissent wanting rates unchanged, while Bullard could favor a 50 bp rate cut (only taking 2019-voters into account here).”


“Pricing for the FOMC to cut the funds rate for a third consecutive time, from 1.75-2.00% to 1.50-1.75%, is above 90%. Pricing for another move in December is only about 20%. Arguably the FOMC could hold steady as it waits for clarity on US-China trade relations and with the US stock market at a record high.”

“There are also no quarterly forecasts (“dot plot”) until December. Indeed we should see at least 2 dissents against the expected rate cut, which may be best seen as a further unwinding of 2018 rate hikes which turned out to be unnecessary due to the deterioration in the global economy and not entirely coincidental deepening of US trade protectionism.”


“A rate cut from the Fed looks a done deal this week as it takes out more insurance against elevated external risks.”

“Forward policy guidance may point to the FOMC taking some time out to observe the impact of recent cuts.”

“The risk is for more easing, at some point, given low inflation expectations, modestly above trend growth and elevated downside risks.”


According to the Research Department at BBVA, the Federal Reserve (Fed) will cut rates for the third time this year. They expect a 25bps cut, as elevated trade uncertainty and weakening investment outlook continue to weigh on the committee’s outlook.

“Markets have aligned with the October interest rate cut, but have lowered their expectations for an additional cut in December.”

“The committee will likely remain split over how to approach future interest rate decision. The hawks, fearing that overly accommodative conditions could fuel financial instability, and the centrist, wanting to allow for time to evaluate the impact of increased accommodation, will likely support a pause. After fulfilling the “mid-cycle” adjustment, the doves, despite concerns that delaying rate cuts could jeopardize the current expansion, may support a temporary pause if trade tensions between the U.S. and China remain in abeyance.”

“On the balance sheet, in an effort to disentangle the current efforts to replenish bank reserves with the stance of monetary policy, the committee will likely maintain its current policy course announced over the intermeeting period.”

“We expect that options for addressing the uptick in money market volatility such as the scope of the reserve shortfall, the impact of liquidity and capital requirements, regulatory guidance, standing repo facility and the presence of regime changes in reserve preferences will be discussed at the meeting.”


Previewing this week's critical Federal Open Market Committee (FOMC) meeting, “the US Fed is expected to cut rates for a third time at their policy meeting on 30 October,” said ABN AMRO chief economist Han de Jong. “We are forecasting a fourth cut in December, but our conviction level has fallen a little.”

“The Fed has explained the cuts as ‘insurance’ against an undesirable weakening of the economy. Economic data have generally shown some weakening, but not excessively so. In addition, one can wonder how much insurance one requires. Whether or not there will be a fourth cut this year in December will depend on the dataflow between now and then.”


“Eric Rosengren will oppose another rate cut having said on October 11 that “my forecast for the economy does not envision additional easing being necessary”. James Bullard, meanwhile, continues to emphasise downside risks, encouraging “the committee to take action”.”

“Other Fed voters have been more equivocal in their views, but the general use of the word “risks” has been a key theme. Given the deteriorating growth story and the benign inflation backdrop we feel that a majority will once again come down in favour of a rate cut. Economists are mixed, but with the market currently pricing in 23bp of a 25bp rate cut for Wednesday we believe the Fed will take action.”

“Assuming the economy continues to soften in line with our view – we expect sub 2% 3Q19 GDP growth and sub 1.5% growth in 4Q – then the Fed will likely follow up with additional rate cuts in December and January.”


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