Xinan Asset Management: History shows that the Fed is more likely to cut interest rates by 25 basis points

Seema Shah, chief global strategist at Principal Asset Management, said in a report that while some may think the Fed will cut rates by 50 basis points this week, history shows that a 25 basis point cut is more likely. "Since the late 1980s... 25 basis point cuts have been the norm, with 50 basis points being the exception." She said there have only been two rate-cutting cycles that started with a margin of more than 25 basis points: in January 2001 during the dot-com bubble, and in September 2007 during the subprime mortgage crisis. Both periods stand out, marked by concerns about severe asset price bubbles and financial systemic risks. (Jinshi)