Capital Economics: Market Overestimating Fed Rate Cut Prospects, US Short-Term Rates Face Upside Risk
BlockBeats News, August 20th, a member of the TCW Group Macro Investment Committee, Kevin Thozet, stated in a report that the US short-term interest rate faces upward risks, and the market is too confident about the Fed's interest rate cut prospects. The US money market has already priced in at least two interest rate cuts this year, reflecting the market's expectation that signs of further economic and inflation slowdown in the US will emerge. Thozet stated: "Considering the resilience of the US economy, policy uncertainty, and the persistence of inflation pressure, we believe this expectation is too high." The trend of long-term US Treasury bond yields is more balanced. The current 10-year US Treasury bond yield at 4.300% is expected to fluctuate within a range of about 50 basis points above and below the current level. (FXStreet)
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