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Should the Federal Reserve listen to its elders and cut rates now, before September?

Last week Jeremy Seigel was lambasted for screaming for a 75bp Federal Reserve emergency rate cut.

As you’ll see from that linked post, he did pull his head in. I’m not sure what the point of screaming for such a panic move was. unless it was the publicity.

Moving on. Cooler heads have nevertheless argued for rate cuts before the September meeting.

And, Alan Blinder also. Blinder is a professor of economics and public affairs at Princeton and served as vice chairman of the Federal Reserve from 1994-96:

  • the American jobs machine has slowed
  • While the stars look to be aligning for a September rate cut, why wait?

Blinder called for a July rate cut in this Wall Street Journal (gated) piece.

I think the chance of a cut prior to September is close to zero. But … Federal Reserve Chair Powell speaks at the Jackson Hole Aug 22-24 conference if he wants to surprise us.

This article was written by Eamonn Sheridan at www.forexlive.com.

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