Dovish testimony from Powell, 3 rate cuts on the way, starting with 25bps in July

Author: Eamonn Sheridan | Category: Central Banks

That's the expectation from Bank of America / Merrill Lynch for the FOMC after Fed Chair Powell's testimony on Wednesday 

Powell "delivered a dovish testimony"
  • "hinting strongly at an upcoming cut"
  • expect a 25bp cut in July (31st)
  • and cuts thereafter at each of the following two meetings (September17-18 and October 29-30)
  • cumulative 75bp of easing
More from the note:
  • The Fed seems to be willing to dismiss the better data from the US and instead is focusing on the weaker global data.
  •  Indeed, when Powell was asked if the strong jobs report changed his views on cuts, he stated "no". 

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