Federal Reserve meeting minutes: Option pricing implies one to two interest rate cuts within the year

Odaily Planet Daily News: The minutes of the Federal Reserve meeting pointed out that the benchmark policy path based on implied option prices (representing mainstream market expectations) has slightly shifted downwards during this period, indicating that there may be 1 to 2 interest rate cuts (each by 25 basis points) by the end of the year - only slightly more than expected at the March FOMC meeting. The probability distribution of year-end interest rates implied by options shows a left shift, indicating a significant increase in downside risk. Due to the market's perception that the downward risk of policy interest rates has intensified, the implied expectation in the futures market is that the policy path will be further lowered, indicating that there may be about three interest rate cuts before the end of the year. The market expectation survey shows that the median benchmark interest rate path has not changed much, still indicating that there will be 2 to 3 interest rate cuts this year. However, the survey indicates that the divergence among respondents regarding the most likely policy path is expanding. (Golden Ten)