From the Fed to Global Analysts: September Is the Momentum for a Rate Cut
Interest Christopher Waller (Fed Governor)
"I think we need to start cutting rates at the next meeting... and then we don't need to follow a locked-in pace." Waller urged a 25 basis point cut in September and left open the possibility of further adjustments depending on subsequent economic data.
John Williams (New York Fed President)
Williams predicted that gradual rate cuts would occur if economic conditions matched his predictions—namely rising unemployment and cooling inflation by 2026. He called current policy "a bit restrictive" and indicated a cut could begin in September, though he did not specify a specific timeframe.
Fed Chair Jerome Powell & FOMC (collective)
Fed Chair Jerome Powell stated that "with policy in a constrained area, ... changes in the balance of risks may require an adjustment in our policy stance," leaving open the possibility of a rate cut in September.
Overall, the September meeting was viewed by the market as "key" for a 25 basis point cut.
Austan Goolsbee (Chicago Fed President)
Goolsbee stated that he has not yet decided whether to support a September rate cut. He also emphasized the importance of maintaining the Fed's independence despite political pressure.
Leading Analysts and Brokers Statements
Standard Chartered
Significantly revised: now forecasts a 50 basis point rate cut at its September meeting following weak US jobs data.
Bank of America (BofA)
Projected two 25 bps rate cuts—one in September and one in December. It also stated the potential for additional cuts if jobs data continues to weaken.
Barclays, Morgan Stanley, Deutsche Bank, and Citi
Barclays revised its forecast: now forecasts three 25 bps rate cuts this year.
Morgan Stanley and Deutsche Bank do not see August's jobs data as weak enough to support a 50 bps cut, although they left open the possibility of a second round.
Citibank also maintained its assumption of a 25 bps cut in September, but warned that the market was too optimistic.
Evercore ISI
Evercore analysts stated: "We think a 25 basis point rate cut in September is currently relatively data-insensitive," meaning the market is almost certain to see a cut, barring any major surprises that change the narrative.
Ameriprise & Anthony Saglimbene
Said that "The market is likely to ignore some weak economic data because it likely means the Fed will have more room to cut rates this year."
Jake Dollarhide (CEO, Longbow Asset Management)
Given the fact that the market has already priced in expectations of a 25 bps cut, he warned that "If people are buying because they're expecting 50, it's not going to happen."
Source: Newsmaker.id
