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