TechFlow, October 28 — According to Jinshi Data, the Federal Reserve's policy committee may take two decisive dovish actions simultaneously on Wednesday: a 25-basis-point rate cut accompanied by signals of further easing, and an announcement to end its balance sheet reduction program (which could put downward pressure on Treasury yields). Derek Tang, analyst at Fed-watching firm LHMeyer, noted, "The combination of rate cuts (along with expectations of further easing) and an early halt to balance sheet runoff would significantly support market risk appetite." He added that while uncertainty remains over whether the tapering will end this week, the recent tightening in funding markets has substantially increased the likelihood of such a decision.
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