Market Sentiment Shifts Amid New Economic Growth Concerns
Friday, 2 August 2024, 04:40
Market Sentiment Shift
It's been a rollercoaster ride of a week for investors, and Friday promises to continue the trend. Risk assets in particular are set for a heavy beating when Europe wakes up.
Economic Outlook Concerns
All it took was a softer-than-expected ISM report on U.S. manufacturing to start worrying about the economic outlook. Markets are now filled with doubt, abandoning previous optimism regarding the Federal Reserve's signals on a potential rate cut in September.
Traders' New Predictions
- Traders have adjusted their expectations significantly.
- There is now a greater chance priced in for a 50-basis-point rate cut next month.
- This is a shift from the previous consensus of a 25 bps cut.
The fear now is that the Fed may be behind the curve in its rate-easing approach.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.