The majority of economists forecast a 25 basis point rate cut by the Fed in September, without backing for significant or emergency cuts
Publication Time:2024-08-09 19:26:09
According to a recent survey, the majority of economists anticipate that the US Federal Reserve System (Fed) will only take moderate action during its September meeting, lowering the benchmark interest rate by 25 basis points. This prediction contrasts sharply with the calls from some large financial institutions on Wall Street, which advocate for the Fed to undertake a more significant reduction in interest rates. Approximately three-quarters of the surveyed economists predict that the Fed will implement this rate cut at its September meeting, while the remaining economists favor a larger cut. Additionally, the survey indicates that the likelihood of an emergency rate adjustment before the September meeting is estimated at 10%. It is noteworthy that the recent release of employment data has been disappointing, leading institutions such as JPMorgan and Citigroup to alter their expectations of the Fed. These institutions now forecast that the Fed may raise interest rates by 50 basis points in the coming month. However, market participants' expectations expressed through futures contracts suggest that they believe there is up to 100 basis points of rate cut space for the Fed by the end of the year, with some of these expectations possibly reflected in the first rate-cut action next month. Nonetheless, the general consensus among economists is that the Fed will conduct rate cuts of 25 basis points each in the following months, specifically in September, November, December, and the first quarter of next year.
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Economist Predictions
September meeting