Analysis: If Rick Rieder Were Appointed New Fed Chair, Three Rate Cuts Could Happen This Year
BlockBeats News, January 28th. As a Wall Street veteran, Rick Rieder is believed to bring a market-centric approach to the Federal Reserve. Last September, he advocated for a more aggressive 50-basis-point rate cut instead of the Fed's then-preferred 25-basis-point gradual pace. At the same time, he also opposed the central bank's forward guidance on future interest rate trends, known as the "dot plot."
Evercore ISI economists, including Krishna Guha, wrote earlier this week, "He will maintain a dovish rate stance and may advocate for three rate cuts this year."
Currently, the interest rate swap market is only pricing in less than two 25-basis-point rate cuts by 2026. However, in the SOFR options market, a significant amount of positions has emerged recently, benefiting from multiple rate cuts, with the goal of lowering the federal funds rate to as low as 1.5% by the end of this year, well below the current pricing of around 3.2% in the interest rate swap market. (Golden Finance)
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