FED Balance Sheet Shrinks Amid Rate Cut Predictions

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FED Balance Sheet Shrinks Amid Rate Cut Predictions

The Fed balance sheet shrank by $28.6 billion in one week.

JPMorgan:

  • We expect the first Fed rate cut in November.

Bank of America:

  • We think the Federal Reserve Board will start cutting rates in September. (Predicting two rate cuts this year)

Reuters Survey:

  • The Federal Reserve Board will start cutting rates in September—analysts expect two 25 basis point cuts this year.
  • The dollar will weaken, but Fed monetary policy easing is necessary.

Kashkari, Fed Chair:

  • The Federal Reserve Board rate should remain unchanged for a long time.

10x Research Analysts:

  • We forecast a BTC rally to $83,000 in the coming weeks, thanks to global central banks easing monetary policies (Bank of Canada, ECB, etc. lowering interest rates).
  • Considering economic growth, employment, and reduced consumer spending in the US, lowering inflation is only a matter of time.

Market Expectations (Fed Rate):

  • June 12: Pause.
  • July 31: Pause.
  • September 18: Pause.
  • November 7: 25 basis point cut to 5.00-5.25%.
  • December 18: Pause.
FED Balance Sheet Shrinks Amid Rate Cut Predictions

Earlier: Nonfarm Payrolls

US Macroeconomic Data:

  • Unemployment Rate (May)
  • ACTUAL: 4.0% FORECAST: 3.9% PREV: 3.9%
  • Change in Non-Farm Employment (May)
  • ACTUAL: 272K FORECAST: 182K PREV: 165K
  • Average Hourly Earnings (YoY) (May)
  • ACTUAL: 4.1% FORECAST: 3.9% PREV: 4.0%
  • Average Hourly Earnings (MoM) (May)
  • ACTUAL: 0.4% FORECAST: 0.3% PREV: 0.2%
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