Trader: Inflation Has Not Derailed September Rate Cut, Next Week Will Be Extremely Busy
Jinse Finance reported that after the release of the PCE data, the Federal Reserve is still expected to cut interest rates at its September 16-17 meeting. Michael Lorizio, head of U.S. rate trading at Manulife Investment Management, said: "The PCE has further reduced the risk of a September rate cut being derailed. At least from this perspective, the inflation component will not play any role in lowering the probability of a September rate cut." Long-term bond yields rose on Friday as traders closed positions ahead of the long weekend and rebalanced portfolios at the end of the month. Some interest rate hedging may also have impacted the market, and it is expected that after many people return from summer vacation next week, the corporate bond market will rebound. Lorizio said: "We are going to have a very busy week... The primary market and all spread product markets will fully return, especially the corporate bond market." Next Friday will also see the release of August employment data, which could be a key factor in determining the Federal Reserve's near-term policy. (Golden Ten Data)
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