[The Federal Reserve to Announce Rate Decision Early Thursday, Market Expects a 25 Basis Point Cut]
The Federal Reserve will announce its rate decision at 03:00 on Thursday, with the market expecting a 25 basis point cut to 3.50%-3.75%. There is division within the FOMC, with some voting members possibly opposing further rate cuts. Due to the government shutdown causing the absence of key October data, changes to the SEP and dot plot are expected to be limited. The market is focused on whether the Fed will introduce a 'Reserve Management Purchase Program' (RMP) after ending balance sheet reduction. Bank of America predicts the Fed may purchase approximately $45 billion in short-term Treasury securities per month starting in January, which, combined with MBS reinvestment, could reach around $60 billion. If the RMP is announced, the meeting's focus may shift to the balance sheet rather than the interest rate path.