Institution: The Fed's dot plot may test the market's optimistic sentiment towards rate cuts

Elmar Voelker, senior fixed income analyst at Baden-Württemberg Landesbank (LBBW), said in a report that the new interest rate expectations, or dot plot, to be released by the Federal Reserve at its meeting next week are unlikely to keep pace with the current rising expectations of rate cuts. "It seems at least doubtful whether the forecast adjustments will keep pace with market expectations," he said. The same is true for the 2025 forecast. Voelker said the dot plot could become a "potential stumbling block for bond prices to rise." The market speculates that the Federal Reserve may cut interest rates by a large amount of 50 basis points next week, but the bank's recent forecasts only suggest a 25 basis point cut this year. (Jinshi)