Will it be 25 or 50 basis points? A case for a 50 basis point rate cut could be made: Goldman Sachs chief economist https://finance.yahoo.com/news/a-ca...-goldman-sachs-chief-economist-171721204.html The Federal Reserve front-loading interest rate cuts to reignite a slowing US economy is still a possibility. "I wouldn't rule out 50 basis points, but 25 basis points strikes me as more likely," Goldman Sachs chief economist Jan Hatzius told Yahoo Finance at the Goldman Sachs Communacopia & Technology Conference on Monday. "I think there is a solid rationale for doing [a 50 basis point cut]. And the rationale is that five and three-eighths, five and a quarter to 5.5% is a really high fed funds rate. It's the highest policy rate in the G10. It is despite the fact that the US has actually seen more progress on inflation than most G10 economies," Hatzius added. Investor attention is squarely on the Fed as it nears its next monetary policy decision on Sept. 18. The Fed has widely telegraphed its first rate cut in several years as it looks to stabilize an economy that's beginning to slow. Read more: What the Fed rate decision means for bank accounts, CDs, loans, and credit cards This slowdown — which has unnerved investors the past month — has been seen everywhere from US manufacturing data to Dollar General's (DG) and Dollar Tree's (DLTR) earnings. More recently, the August employment report renewed concerns on the Street about a steady cooling in the economy, in part because of elevated interest rates. The economy added 142,000 jobs last month, below economist estimates for 160,000. July's job figure — a surprise that disappointed the markets — was revised down to 89,000 from 114,000. The sluggish patch of economic data has led to some on the Street speculating the Fed should cut rates by 50 basis points next week. But pulling out such a bazooka could damage market sentiments, Hatzius and his industry peers believe. "If the Fed were to cut by 50 basis points in September, we think markets would take that as an admission that it is behind the curve and needs to move to an accommodative stance, not just get back to neutral," Bank of America US economist Aditya Bhave said in a client note. "We think such aggressive cuts are not warranted based on the data we have in hand. And, if the Fed starts with a 50bp cut, less dovish forward guidance, either via Fedspeak or the dots, might lose credibility."
atl fed says 50. cme says 25 https://www.atlantafed.org/cenfis/market-probability-tracker https://www.cmegroup.com/markets/in...trading/interest-rates/countdown-to-fomc.html
It must be 50 basis points, cause the expectation is now 2.5% for CPI today. A few days ago it was 2.6% expected. If that comes in near like 2.5% or 2.6%, the FED can justify easily a 50 basis points cut. Everything else would be too hawkish causing likely a recession rather than a soft landing. I expect now a 50 points cut for next week. The ECB will be first with a larger cut tomorrow.
With August inflation coming in at 2.5% -- in my opinion a rate cut of 50 basis points becomes more likely. Consumer prices rose 0.2% in August as annual inflation rate hits lowest since early 2021 https://www.cnbc.com/2024/09/11/cpi-inflation-report-august-2024-.html The CPI, a broad measure of goods and services costs across the U.S. economy, increased 0.2% in August, in line with the Dow Jones consensus. That put the 12-month inflation rate at 2.5%, down 0.4 percentage point from the July level and the lowest since February 2021. Traders priced in an 85% chance that the Fed will approve a quarter percentage point, or 25 basis point, interest rate reduction when its meeting concludes Sept. 18. Real earnings also rose for the month, with average hourly earnings outpacing the monthly CPI increase by 0.2%. (More at above url)
25 bp. The market was trying to scare the Fed to give 50 bp by dumping "risky assets" like a spoiled child throwing tantrums but the Fed is unfazed and 25 bp it is.
It's a bizarro world where the wall street pumpers want a preemptive rate cut even before there is a downturn. I'm sure a 50bps rate cut will lower OER right? Real Estate always goes down when affordability rises. Bubbles & more bubbles is all there is left in the 1st world economies.
what's bizzaro with debt payments above 1 trillion? USA need interest rates under 1% to make it sustainable long term