Since a 25bps rate cut is fully priced in, the main focus for markets will be whether the median 2025 dot shows 50bp or 75bp of cuts
With little change in the macro forecasts - for now - Bank of America thinks the 2025 median will continue to show 50bp of cuts, even as the distribution of dots moves down. Alternatively, Goldman now expects 75bps of rate cuts this year and another 50 next year. Clearly, it's all a close call for now. The dot plot should then show one more 25bp cut in 2027, although with Powell on his way out in May 2026 all bets are off regarding the longer horizon. The longer-run median is likely to stay at 3.0%. With that in mind, here is what Bank of America thinks the names behind tomorrow's dots will look like. Of particular interest will be the Lisa Cook and Stephen Miran dots. Source: BofA
Senate votes 48-47 to confirm Stephen Miran to Fed board
Source: Kevin Gordon @KevRGordon, Blomberg
September FOMC: odds on the Fed’s rate decision
Source: Polymarket
UPDATE:
According to the CME FedWatch tool, markets see a ~93% chance of one rate cut in September 2025 (to 4.00–4.25%) and a ~92% chance of two cuts by December (to 3.50–3.75%). Source: cointelegraph
Consensus is for cuts with no recession
Source: Goldman Sachs
By FT >>> Donald Trump cannot fire Lisa Cook for now, according to a US judge, in a major win for the Federal Reserve governor fighting the president over efforts to remove her from the central bank
Jia Cobb, the federal judge presiding over the case in Washington, late on Tuesday held that Cook may not be fired while litigation is pending. “Cook has made a strong showing that her purported removal was done in violation of the Federal Reserve Act,” Cobb wrote. A provision of that act allows a president to remove a Fed governor only “for cause”, which according to Cobb would involve failing to fulfil statutory duties. The ruling will allow Cook to attend the Fed’s policy-setting committee meeting next week, when it is widely expected to cut interest rates for the first time this year. It marks a setback for Trump, who last month announced he was sacking Cook for alleged mortgage fraud, amid a campaign to pressure the US central bank into lowering borrowing costs. Source: FT https://lnkd.in/exQeKfwY
The U.S. Justice Department has launched a criminal mortgage fraud probe into Federal Reserve Governor Lisa Cook
It has issued grand jury subpoenas out of both Georgia and Michigan, according to documents seen by Reuters and a source familiar with the matter. The investigation followed a criminal referral from Federal Housing Finance Agency Director Bill Pulte, and is being conducted by Ed Martin, who was tapped by Attorney General Pam Bondi as a special assistant U.S. attorney to assist with mortgage fraud investigations involving public officials, along with the U.S. Attorneys' offices in the Northern District of Georgia and the Eastern District of Michigan, according to the person, who spoke anonymously since the matter is not public. Source: Reuters
🚨 Goldman Sachs has doubled down on its optimistic forecast for gold, maintaining a structural bullish view on the precious metal
The investment bank predicts gold will reach $3,700 per ounce by the end of 2025 in its base case scenario, with further growth to $4,000 by mid-2026. Goldman’s analysis indicates that a recession could accelerate ETF inflows and drive prices even higher to $3,880. More dramatically, extreme risk events such as challenges to Federal Reserve independence or shifts in U.S. reserve policy could potentially catapult gold prices to $4,500 by year-end 2025. Source: www.goldsilver.com https://lnkd.in/eCau26HP
