Economists at Bank of America said in a note responding to client concerns that the Fed has historically tended to act more dovishly than expected, avoiding hawkish surprises. "The Fed generally likes to anticipate any tough signals well in advance so as not to accidentally exacerbate financial conditions. The Fed seems more willing to surprise in a dovish direction." Markets now expect a 55 per cent chance of the Fed cutting rates by 50 basis points, compared with a 45 per cent chance of a more modest 25 basis point cut, according to CME. "BofA believes that the Fed is unlikely to implement a hardline approach to rate cuts, which should support long-term bonds and a steepening of the curve.