Institution: Fed Rate Cut and Balance Sheet Reduction Combo or Market Risk Appetite Boost
BlockBeats News, October 28th, the Federal Reserve's Federal Open Market Committee may take two decisive dovish actions on Wednesday: implementing a 25-basis-point rate cut and releasing further dovish signals, while also announcing the end of balance sheet reduction (which may put downward pressure on Treasury yields). LHMeyer, a Federal Reserve-watching institution, analyst Derek Tang pointed out: "The rate cut (along with subsequent easing expectations) and the early termination of balance sheet reduction will provide significant support for market risk appetite." He added that although the decision to end balance sheet reduction this week is still uncertain, the recent turmoil in the funding market has significantly increased the likelihood of this move. (FX678)
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