Fed to cut rates in September and maybe once more this year
==========
A majority of 100 economists polled by Reuters predict that the U.S. Federal Reserve will wait until September to cut its key interest rate. Half of the economists forecast that there will be only two cuts this year, while about a third predict more. This change in outlook follows evidence of persistent strength in the U.S. labor market and stronger-than-expected inflation data. Fed Chair Jerome Powell's remarks also dimmed hopes for rate cuts anytime soon. Financial markets are expecting the first reduction in September and one more in either November or December. Last month, a two-thirds majority of economists expected the first rate cut in June. Just over half of economists surveyed, 54 out of 100, predicted the first decrease in the federal funds rate to happen in September. The outlook for various inflation measures was upgraded from last month, but none of these measures are expected to reach 2% until at least 2026. While there was no majority on how many rate cuts would be delivered this year, half of the participants saw two quarter-percentage-point cuts, 34 said more than two, 12 saw only one reduction, and four said none. A 60% majority of economists said the chances were high or very high that the Fed would hold rates steady for the remainder of this year. The U.S. economy is forecast to expand at an average of 2.3% this year, up from the 2.1% forecast last month.
#FederalReserve #InterestRates #Economists #Inflation #LaborMarket