Regarding the change, Morgan Stanley notes that “a reversal in key components suggests disinflation to come, but given the lack of progress in recent months, it will take a little longer for the FOMC to regain the necessary confidence to take the first step. This is also in line with what traders are seeing, with the probability of a September rate cut estimated at around 82% currently. The total rate cut expected for the year is about 44 basis points, which hasn’t changed much since the U.S. jobs report was released last week.
This article was written by Justin Low at www.forexlive.com.
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