The Federal Reserve Expected to Cut Rates by 25 Basis Points, Survey Shows
Investing.com -- As the Federal Reserve prepares to announce its latest decision on borrowing costs, a survey of Investing.com readers suggests that a 25-basis point reduction is more likely than a 50-basis point cut. Analysts at ING believe the outcome is still uncertain, with a close call expected.
In a poll conducted on social media platform X, 60.2% of respondents anticipate a quarter-point reduction, while 39.8% are betting on a larger half-point cut. CME Group's FedWatch Tool indicates a 63% chance of a bigger rate cut, driven by recent reports suggesting that a more aggressive move is still on the table.
Recent data, including an unexpected rise in US retail sales in August, has added complexity to the Fed's decision-making process. Mixed inflation figures and changing labor market dynamics further complicate the outlook for policymakers.
Market participants are closely watching for signals on the Fed's future path, with expectations of at least 100-basis points in cuts by the end of 2024. The central bank is likely to emphasize flexibility in its approach, given the uncertain economic environment.
Fed Chair Jerome Powell has highlighted the need for adjustments in monetary policy, citing potential risks to the job market. The outcome of the Fed's easing cycle could have long-lasting implications, as policymakers aim for a smooth transition to a more accommodative stance.
In conclusion, the Fed's decision on interest rates can have significant implications for the economy, financial markets, and individual investors. Understanding the factors at play and staying informed about the central bank's actions is crucial for anyone looking to navigate the ever-changing landscape of monetary policy.