RCM/TIPP index supports bets on Fed rate cuts
On Tuesday, the RCM/TIPP Economic Optimism Index rose modestly from 46.1 in September to 46.9 in October. Despite the increase, the figures are unlikely to cause the Fed to worry about a possible increase in consumer spending. Upward trends in consumer spending could fuel demand-driven inflation, potentially delaying a Fed rate cut.
According to the CME FedWatch Tool, the probability of a Fed rate cut increased by 25 basis points from 84.4% on Monday to 88.8% on Tuesday.
Experts weigh in on the Fed’s potential interest rate path
Arch Capital Global Chief Economist Parker Ross commented on the US economy and the Fed’s interest rate path: to report,
“Key takeaway: September’s job growth of 254,000 was much stronger than expected and provided new impetus to a plausible path to a soft landing. Macro implications: Slowdown concerns have been addressed, bringing market prices in line with our expectation of a 25 basis point rate cut in November.”
Investors are clamoring for more stimulus from Beijing
While expectations of a Fed rate cut supported US markets, Hong Kong and Chinese markets faced challenges. On Tuesday, the much-awaited National Development and Reform Commission (NDRC) press conference disappointed investors. There were no new policy measures to stimulate demand for riskier assets.
The Kobeissi letter commented on the press conference and market sentiment: to report,