Economics
Fed May Cut as Soon as March Based on Market History, BMO Says
- Firm’s strategists cite recent drop in eurodollar futures rate
- Rates have plunged, with 10-year yield hitting a record low
Photographer: Joshua Roberts/Bloomberg
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Market pricing suggests that a Federal Reserve interest-rate cut could be in the cards as soon as March or April, even though the first quarter-point reduction isn’t being fully priced in until around June.
That’s the view of BMO Capital Markets’ Jon Hill and Ben Jeffery, who said that, since the 1980s, front-end markets have almost never priced in cuts to this extent without the Fed following through. And most of the time, that accommodation comes within two months, according to the firm.