The Treasury market is pricing in a 25 basis point rate cut by the Fed in November and December, in line with the median of the dot plot

Felipe Villarroel, portfolio management partner at TwentyFour Asset Management, said that in the past few weeks, investors' expectations have become more consistent with the Fed's expectations. "The Treasury market is currently pricing in two 25 basis point rate cuts in November and December, which is consistent with the median of the dot plot," he said in a note. He said the Fed's base case is a soft landing (lower inflation without damaging the economy and the labor market) and growth close to the potential growth rate of 2%, which requires setting the neutral interest rate at around 3%. (Jinshi)