Standard Chartered Joins 4 Banks Predicting Fed Rate Cut This Wednesday
Standard Chartered has now jumped on the bandwagon of major banks that expect the Fed to cut interest rates this Wednesday.
Quick overview
- Standard Chartered joins major banks in predicting a 25-basis-point interest rate cut by the Fed this Wednesday.
- The shift in expectations is driven by concerns over recent weak US economic data and a cautious outlook for growth.
- Analysts suggest that the Fed may maintain current interest rates until 2026, reflecting a more cautious stance in the financial sector.
- Investors are advised that while a rate cut aims to support the economy, it does not guarantee immediate market rallies.
Standard Chartered has now jumped on the bandwagon of major banks that expect the Fed to cut interest rates this Wednesday. And it’s not alone – they’re aligning their view with the likes of JPMorgan, Morgan Stanley, and Nomura, all of which are now predicting a 25-basis-point reduction.
This shift in thinking is down to a growing sense of unease over the US economic data of late. Standard Chartered says that slowing growth requires the Fed to cut rates to keep the economy stable. “We think there’s a pretty solid case for an insurance cut in December, but to be honest, we’re not 95% certain, more like 60-40,” they said – and that’s based on pretty limited data post-shutdown.
Analysts reckon that after Wednesday, the Fed will probably sit tight on interest rates through to 2026. That’s a marked change from the bank’s previous stance and a sign that the financial sector is becoming much more cautious.
🚨 Standard Chartered is now expecting a 25 bps rate cut THIS WEEK.
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If they’re right, liquidity firehoses are about to reopen — and risk assets love early easing cycles.Lower rates = cheaper capital, stronger flows, and a macro tailwind that crypto has been starving… pic.twitter.com/dZHKdyDwdr
— Marzell (@MarzellCrypto) December 8, 2025
What This Means for Markets & Investors
Investors are now hanging on the FOMC meeting on Wednesday – this could be the third rate cut of the year after all. Some key factors at play here include:
- A pretty weak set of November economic numbers that has made the Fed think again
- Fed officials are talking up the possibility of a bit more flexibility in policy (whatever that might mean)
- The likelihood that a few Fed members might be at odds over the rate decision
Nomura says that while the vote is expected to be close, there’s a chance of further easing in mid-2026 – depending on who gets appointed as the new Fed chair (maybe even the likes of Kevin Hassett).
Meanwhile, markets are also responding to some broader changes in the financial landscape. Analysts point out that the end of Quantitative Tightening and these overnight repo operations have injected much more liquidity into the system, making assets like Bitcoin more appealing to institutional investors.
What the Fed is Doing and What it Means for Finances
The Fed has just pumped $13.5 billion into the banking system through one of these overnight repo ops, following the end of QT on Dec 1. But don’t get too excited – a rate cut doesn’t automatically mean that stock prices or crypto values will go flying up either.
Key things to keep in mind from an investor’s perspective are:
- A rate cut is aimed at supporting the economy, not at sparking an overnight market rally.
- Policy decisions are still all about the data – the Fed’s not going to make any fixed commitments to cut rates six months from now.
- All that extra liquidity could flow into riskier assets, like cryptocurrencies, down the line.
As the FOMC meeting approaches, markets are gearing up for some potential turbulence while keeping a close eye on the Fed’s long-term policy direction.
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