Capitol Macro: Fed to cut rates by nearly two percentage points from now on

Paul Ashworth, an analyst at Capital Macro, said in a report that the Federal Reserve will likely continue to cut interest rates by a margin of 25 basis points until the target federal funds rate falls to a range of 3%-3.25%. That would be higher than the market's general expectation that the terminal rate will reach 3.25-3.5 per cent or higher, according to the Chi-Mei (CME).Ashworth expects the Fed to cut rates by 25 basis points in November, which is the most vocal of the market's expectations, although the chances of the rate being expected to remain unchanged in November have risen to 22 per cent from 15 per cent yesterday.