Market comment - Markets looking ahead to Federal Reserve policy meeting

Davy Research
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Markets were quiet on Monday ahead of this week’s Fed policy meeting. However, with the curve pricing in two 25 basis point rate cuts by December 2019 with an 85% probability, it seems likely that investors may be disappointed. At best, Fed Chair Jay Powell may suggest that the FOMC is prepared to ‘fine tune’ rates given weak CPI inflation; however, with the US economy still robust, he will not signal that he is about to embark on a rate cutting cycle.