TechFlow, September 11 — According to Jinshi Data citing a Reuters survey of 107 analysts, nearly all expect the Federal Reserve to cut interest rates by 25 basis points on September 17, as softening labor market conditions outweigh inflation risks. Most analysts anticipate further rate cuts in the next quarter.
Stagnant job growth in August, along with significant downward revisions to employment data over the past 12 months through March, has prompted many economists to lower their forecasts and suggest the Fed may deliver more rate cuts than previously expected. Markets have fully priced in a September rate cut and now expect three reductions this year, up from just two only weeks ago.
Michael Gapen, Morgan Stanley's chief U.S. economist, said: "The Fed now has four consecutive months of data showing a slowdown in labor demand, and this trend appears increasingly persistent... In short, current inflation levels should be temporarily overlooked, and policy easing should be used to support the labor market. However, we believe a 25-basis-point cut in September is more likely than a larger reduction."
