Paul Eitelman, Senior Director and Chief Investment Strategist at Russell Investments, has indicated that the Federal Reserve is likely to implement a cautious 25 basis point rate cut. He predicts the terminal interest rate will remain between 3.25% and 3.5%. Currently, the yield on the U.S. 10-year Treasury bond stands at 4.1%, exceeding Russell Investments’ fair value estimate. In light of this, it is recommended to adjust investment portfolios by incorporating duration risk management strategies. As the central bank of the United States, the Federal Reserve controls interest rates to stabilize the economy, with rate changes directly affecting investments, borrowing costs, and overall economic conditions. A hawkish cut implies a measured reduction aimed at controlling inflation and economic uncertainty. Changes in U.S. interest rates also influence global financial markets, potentially causing shifts in investment sectors, borrowing costs, and economic momentum. Investors are advised to stay vigilant and adapt their investment strategies to current economic conditions to mitigate potential risks, especially if further rate adjustments occur.
Source: binance
