Nordic Swan: Expects the Fed to cut interest rates by 25 basis points tonight, opening the door to a significant rate cut

Swedish Nordic Swedbank looks ahead to the Fed rate decision, stating that the market is still uncertain about the magnitude of the Fed's first rate cut. The bank expects the Fed to lean towards a 25 basis point cut, but is expected to suggest that this is just the first step in a series of rate cuts. The bank predicts that Fed members will forecast two rate cuts of 25 basis points each at the November and December meetings, followed by another 100 basis point cut next year, totaling a 175 basis point cut. The bank stated: "If our forecast is correct, then the Fed's performance in the next year will be significantly different from market expectations, which could lead to disappointing results." However, the message from Fed Chairman Powell will be that the Fed will take action as needed to support a soft landing, opening the door to more frequent and larger rate cuts