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At a two-day policy meeting this week, Fed officials are expected to cut interest rates for the third time in a row in a similar way to move the economy forward. In this way, the stimulus from the Federal Reserve in 1995 and 1998 will be leveled. It was known as the "great moderation" of the US economy - steady economic growth, falling unemployment and moderate inflation, while the Fed was headed by Chairman Alan Greenspan.
Fed policymakers have not made a clear commitment to cut interest rates again, but if they don't do so on Wednesday, financial markets that are confident of cutting interest rates again may be fried. Billions of dollars of bets in the interest rate futures market are linked to the expectation of the Fed's action. If the Fed's decision deviates from the prediction route, it will usually lead to sharp ups and downs in the bond market and the stock market.
If the Fed announces its third rate cut this year on Wednesday, the overnight target lending rate will fall to 1.5-1.75% in new areas. Michael feroli, an economist at JPMorgan Chase, wrote last week that policymakers may stress that "three cumulative interest rate cuts" have helped to balance the outlook risks and are expected to avoid economic derailment.
The Federal Reserve is scheduled to announce the latest interest rate resolution on Wednesday at 1800gmt. Federal Reserve Chairman Powell will hold a press conference half an hour after the announcement of the resolution.
TD securities analysts wrote last week that policy makers may not close the door to further action, but may "emphasize patience in determining future policy moves."
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