DAVY VIEW

Markets were quiet on Monday ahead of this week’s Fed policy meeting. However, with the curve pricing in two 25 basis point rate cuts by December 2019 with an 85% probability, it seems likely that investors may be disappointed. At best, Fed Chair Jay Powell may suggest that the FOMC is prepared to ‘fine tune’ rates given weak CPI inflation; however, with the US economy still robust, he will not signal that he is about to embark on a rate cutting cycle.