Fed Poised for Aggressive 50 Bps Rate Cut, Standard Chartered Predicts

Markets brace for monetary pivot as banking giant forecasts bold Fed move.

The Rate Cut Reality

Standard Chartered's projection signals a major shift in monetary policy—expectations now point toward a full 50 basis point reduction. That's double the typical quarter-point adjustment central bankers usually favor.

Market Implications

Such aggressive easing would send shockwaves through traditional finance while turbo-charging risk assets. Cryptocurrencies historically thrive in low-rate environments as investors chase yield beyond conventional options.

Because nothing says 'confidence in the economy' like cutting rates by half a percentage point in one go—just ask any trader who remembers the last time they tried that.

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“August labor market data has paved the way for a ‘catch-up’ 50 basis point rate cut at the September FOMC meeting, similar to what occurred at this time last year,” the bank said.

Labor Market Slows as 25 Bps Cut Remains Likely Outcome

The labor market has shown signs of cracking, as August’s nonfarm payrolls showed 22,000 job additions compared to the estimate of 75,000. In addition, the Bureau of Labor Statistics (BLS) revised job additions for the year ended March by a record high of 911,000.

On the other end are Morgan Stanley (MS) and Deutsche Bank (DB), which don’t believe that the labor market statistics warrant a 50 bps cut. CME’s FedWatch tool sides with them, showing odds of 96% for a 25 bps cut and just 6% for a 50 bps cut.