Societe Generale and Standard Chartered predict a 50 basis point rate cut and believe the Fed's policy needs "significant adjustments."

Societe Generale analysts believe the Fed's moderately restrictive stance has persisted for too long and is posing a risk of "overtightening." Therefore, while concerns remain about inflation stickiness, the risk balance within the Fed's dual mandate (employment and inflation) has tilted toward employment, necessitating a more drastic policy adjustment (i.e., a 50 basis point rate cut). They are not alone in this view; Standard Chartered is the only other institution predicting a 50 basis point rate cut this week. However, it's important to note that this view contradicts current market pricing and consensus expectations, which are for a 25 basis point rate cut. As previously mentioned, traders currently rank the probability of a 50 basis point Fed rate cut at only approximately 4%. (Jinshi)