Survey shows: Fed rate cut in September is a foregone conclusion, with at least one more cut expected before the end of the year

Jinse Finance reported that according to a Reuters survey of 107 analysts, almost all believe that the Federal Reserve will cut interest rates by 25 basis points on September 17, as the impact of a weakening job market outweighs inflation risks. Most analysts expect further rate cuts in the next quarter. Stagnant job growth in August, coupled with a significant downward revision of employment data for the 12 months ending in March, has prompted many economists to lower their forecasts and believe that the Federal Reserve may implement more rate cuts than previously expected. The market has fully priced in a rate cut in September, and now expects three rate cuts this year, compared to only two just a few weeks ago. Michael Gapen, Chief US Analyst at Morgan Stanley, stated: “The Federal Reserve now has four consecutive months of evidence showing a slowdown in labor demand, and this trend appears to be more persistent... In short, the current level of inflation should be temporarily ignored, and policy should be eased to support the job market. However, we believe the likelihood of a 25 basis point rate cut in September is higher than that of a larger cut.”