BofA: Fed appears to favor dovish over hawkish surprise moves

Odaily Odaily News: Bank of America economists said in a report responding to client concerns that the Fed's actions have historically tended to be more moderate than expected, avoiding unexpected hawkish moves. "The Fed usually likes to give ample advance notice of any tough signals to avoid unexpectedly exacerbating the financial environment. The Fed seems more willing to surprise in a moderate direction." According to data from the Chicago Mercantile Exchange (CME), the market currently expects the Fed to cut interest rates by 50 basis points with a probability of 55%, while the probability of a more moderate 25 basis point cut is 45%. "Bank of America believes that the Fed is unlikely to implement a tough rate cut, which should support long-term bonds and curve steepening. (Jinshi)