09.13.24

Fed to Pursue Three Quarter-Point Cuts This Year, Economists Say

by: Catarina Saraiva and Dana Morgan

The U.S. Federal Reserve is likely to lower interest rates by a quarter-point this week and at each of the two meetings that follow, according to a survey of 46 economists by Bloomberg News. Respondents see policymakers penciling in a more aggressive rate-cut path in the years ahead compared with what officials had expected in June, the last time they updated their economic and rate forecasts. The median projection will likely show interest rates in a range of 3.5%-3.75% by the end of next year. Economists see policymakers' median unemployment rate forecast edging up to 4.3% this year, up from the 4% expected in June. Furthermore, 80% of economists saw risks to unemployment as weighted primarily to the upside. Even with the increased concern about the labor market, more than three-fourths said the economy would likely continue to expand over the next 12 months. Economic growth forecasts are expected to remain unchanged in officials' latest quarterly projections, but the inflation and core inflation estimates will likely fall a bit, economists said. Still, respondents' views on whether the risks to inflation were to the upside or downside were mixed.

Read the full article on Bloomberg