Danske Bank sees 5 more Fed rate cuts by April 2020

Tuesday, 20. August 2019 14:47

The Federal Reserve will most likely cut interest rates in the United States five more times by April 2020, Danske Bank analysts told CNBC on Tuesday. The prediction means the Fed would cut rates by 25 basis points at each of its next five meetings to reach rates of 0.75% to 1% at its March meeting.

The analysts said the Fed recognizes uncertainty in the economy and added: "In our view, US growth has peaked and will likely slow, but we do not expect a recession to show up in the data near term (depending on Fed action)."

CME's FedWatch Tool shows that markets expect a 25 basis point decrease in interest rates at the Fed's September meeting with a likelihood of 90.4%. However, only 8.6% of market participants see the rates set to 0.75%-1% after the March 2020 meeting.

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