Is the Fed's move this time a "hawkish rate cut"? The key in the future may lie in how dovish Powell will be!

Citigroup trader Akshay Singal successfully predicted the 50 basis point rate cut by the Federal Reserve "unfazed," and even somewhat disappointed. Indeed, the Federal Reserve chose the 50 basis point rate cut that Singal boldly predicted weeks ago. However, the cautious tone of Federal Reserve Chairman Powell and other officials made him reconsider betting on more significant rate cuts in the future. "This 50 basis point rate cut is quite hawkish," Singal said in an interview. "Overall, the Federal Reserve may be satisfied with this outcome as it was not seen as overly accommodative, but the negative impact is that the market is confused." Shortly after the initial rate cut announcement by the Federal Reserve, U.S. bond yields reversed course, with yields across the maturity spectrum falling, the S&P 500 index turning from gains to losses, and the Bloomberg Dollar Index rising during U.S. stock trading hours. His disappointment largely reflects broader market sentiment. The Federal Reserve's projections (dot plot) show that only a slim majority of members support cutting rates by at least another 50 basis points this year. Singal had previously stated at the beginning of the month that "the Federal Reserve will not tiptoe" and will "not hesitate" to make significant rate cuts, but now he is reconsidering his forecast. He pointed out that Powell is the one making policy decisions, but "this chairman is evidently more dovish than the overall FOMC, which gives him pause." "He wields a lot of power, and this will be a key focus in the coming months to understand just how dovish he really is," Singal said. He also noted that the next non-farm payroll reports on October 4th and November 1st will greatly influence the Federal Reserve's next steps. Citigroup economists Veronica Clark and Andrew Hollenhorst stated after the release of the Federal Reserve policy statement on Thursday that they expect the Federal Reserve to cut rates by another 50 basis points in November and by 25 basis points in December. But for Singal, considering Powell's remarks and the Federal Reserve's projections, the rate decision in November is actually a dilemma. He said: "The decision whether the Federal Reserve will cut rates by 25 basis points or 50 basis points in the November meeting is now like flipping a coin, and it will depend on the data."