Analysts at Deutsche Bank suggest that, ahead of this Wednesday’s Fed meeting, a 25-bps rate cut is just about fully priced now.

• “Given the lack of pushback against that pricing by the recent parade of Fedspeak, it’s a relative safe prediction that they deliver another cut to take the fed funds target range to 1.50-1.75%.
• Looking forward though, the focus will be around the tone in the policy statement and in Chair Powell’s press conference. The statement could have some dovish-leaning edits, consistent with the deterioration in data since the September policy meeting. As for Powell, he’ll likely want to maintain his optionality moving forward, committing to neither another cut nor a halt to the cutting cycle.
• Our economists think that he will emphasiяe that another cut would require further deterioration in the data, which they expect will materialяe over the next few months, as opposed to a flatlining in conditions.”