The Federal Reserve is tipped to cut interest rates by 25 basis points at the end of its policy meeting on Thursday, according to a survey of Investing.com readers on the social media platform X.
Out of 1,833 respondents, 63.3% said they see the Fed lowering the key interest rate by 25 bps, while 21.2% see no cut at all and 15.5% see the Fed cutting rates by 50 bps.
A cut would see the Fed reduce interest rates for a second straight time, given a steady slowdown in inflation pressures.
In September, the Fed reduced its federal funds rate target range by half a percentage to 4.75% to 5%. The cut came after the central bank held rates steady for over a year.
CME’s FedWatch tool shows traders are currently pricing a 99.1% likelihood that the Fed will cut rates by 25 bps.
In its FOMC November preview note, analysts at Morgan Stanley (NYSE:MS) said strong growth and inflation running closer to the target will lead the Fed to cut by 25 bps.
“We expect the Federal Reserve to lower the federal funds rate by 25bp at the November FOMC meeting,” wrote the bank. “The FOMC statement likely upgrades its assessment of the labor market to highlight strength. In the press conference, we expect Chair Powell to recognize strength in growth and the labor market.”
Meanwhile, Bank of America said in its preview note that the October jobs report sealed the deal for the 25 bps cut.
“Even accounting for hurricane and strike distortions, we believe the Oct jobs report was soft enough to essentially seal the deal for a Nov cut and significantly increase the chances of another cut 25bp cut in Dec,” said the bank. “The FOMC statement should be little changed, barring the language around the policy action and the new target range.”
