pennslammer3handleassembly| Paijie Investment: The Federal Reserve is expected to cut interest rates three times in the next eight meetings

Zhitong Finance APP learnedpennslammer3handleassemblyAnalysts at Piper Sandler said they expected the Fed to cut interest rates three times in the next eight meetings.

The investment firm noted that since the last Federal Open Market Committee meeting, the probability of extreme outcomes-such as a sharp interest rate hike or a sharp interest rate cut-has diminished.

Although uncertainty about inflation has eased, analysts said the broad spread of GDP growth forecasts has left the economic outlook uncertain.

They said: "Our forecast range for key macroeconomic variables remains too broad. Yes, the distribution of inflation outcomes has narrowed significantly during the cycle. But as we have repeatedly emphasized, this is not the case for real GDP growth. The high possibility of recession and rapid growth does not increase 'confidence' in the Fed."

Analysts also pointed to the market's pricing of short-term interest rates and believed that short-term rates could increase relative to long-term yields, which means the prospect of a steeper yield curve remains remote.

They emphasized that from the basic model, the nominal yield curve was not inverted enough, and suggested that 2-year and 10-year yields could rebound by the end of the year. "It's true that these signals are not unprecedented. Still, the results suggest that the prospect of a steep yield curve remains remote."