Waking up to see two pieces of news related to the interest rate cut in September:
Milan has been confirmed by the Senate on September 16 to participate in the interest rate meeting in September and can exercise the role of voting committee.
The appeals court ruled that Trump has no authority to dismiss Cook before the Federal Reserve meeting.
Currently, the situation clearly supports interest rate cuts only from Waller and Bowman, and now with Milan, there should be three votes in favor.
On the other hand, those clearly against the interest rate cut include the Kansas City Fed President, the St. Louis Fed President, and the Vice Chair of Supervision, and possibly Cook as well, which brings the opposition to about three to four votes.
The others are more centrist, as there are a total of 12 voting committee members, so there are still about 5 to 6 members in the centrist camp, among which Powell should have the greatest influence.
A 25 basis point rate cut in September should not be a big issue; if there is no rate cut, it would be a black swan event. However, the probability of a 50 basis point cut in September is also quite low, so the focus should be on the dot plot for 2025 and 2026. If there is still a rate cut space of 50 basis points or more in 2025, it would be beneficial for the risk market, and exceeding 50 basis points in 2026 would also be favorable for the risk market.
This article is sponsored by #Bitget ｜ @Bitget_zh
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