Poll: Federal Reserve to cut Fed Funds by 25bp in September, November and December

Federal Open Market Committee (FOMC) forecast via Reuters polling:

• 101 analysts polled
• 55 forecast federal funds rate cuts by 25 basis points in September, November and December
• 34 predict two rate cuts this year
• 1 respondent forecast only one rate cut
• 11 have tipped cuts by 100bps or more in the upcoming three meetings

Says Barclays:

• “The basis for the cuts that we have is mostly because inflation is coming down. It’s not so much that activity is slowing … We see a pretty resilient economy that’s growing near trend and with that, we think inflation only ebbs gradually,”
• “The labor market is hanging in there just fine. It’s gradually cooling, but we don’t expect it to have really material weakening. The unemployment rate is maybe going to add another 10th or so from where it is. There’s not really any reason for them (the Fed) to panic.”

There is more at that link above if you are interested.

Meeting dates for the balance of this year:

• September 17-18
• November 6-7
• December 17-18

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Via FedWatch, a 25bp rate cut is 77% priced in and a 50bp rate cut 23% priced in:

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