MUFG EMEA
From the lame duck session to a new administration, how to think about rates, macro and the Fed ahead
At a Glance
The desk believes that the Federal Reserve is poised to implement another 25 basis point cut in December 2024, as outlined in MUFG's recent commentary on the macro landscape post-election. This anticipated move would complete a total of 100 basis points in cuts for the year, reflecting a dovish shift highlighted by the FOMC minutes that emphasize market functioning. Per the full note source, the Fed's decision is likely influenced by the recent labor market trends, which show signs of deceleration, and the political context surrounding the election. The desk also anticipates further cuts in 2025, with a potential steepening of the interest rate curve as the market adjusts to the new administration's fiscal policies.