Fed Rate Cuts Likely After This Final Hurdle, Says US FOMC Member Collins
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US Federal Reserve Bank of Boston President Susan Collins on Friday said it is appropriate now for the US Federal Reserve to start interest rate cuts. Moreover, the consumer price inflation (CPI) inflation data remains the last hurdle before the much-awaited Fed rate cuts. Fed Collins Agrees On Starting Rate Cuts By US Fed Boston Fed President Susan Collins, in an interview with the Providence Journal, said the US Federal Reserve could begin easing interest rates provided that CPI inflation release cool further amid a strong labor market. The latest weekly jobless claims fell more than expected, driving a rebound in the market. “If the data continue the way that I expect, I do believe that it will be appropriate soon to begin adjusting policy and easing how restrictive the policy is,” Collins said. “My outlook is for continued gradual reduction back to our 2% target amid a healthy labor market.” She refused to provide more detail on the timing and extent of the Fed rate cuts, but confirmed lower interest rates in the next few years. “We’ll have more data before our September meeting, and I don’t want to get out ahead of that,” said Susan Collins. The U.S. Bureau of Labor Statistics will release the CPI data on Wednesday, August 14. The annual CPI inflation rate in the US fell for a third straight month to a low of 3% last month. Economists estimates annual CPI inflation for July to come at 2.9%. Recently, JPMorgan predicted Fed rate cuts by half a percentage point in September. The Wallet Street giant recently raised the odds of a US recession to 35% by the end of the year, up from 25% as of the start of last month. Notably, CME FedWatch tool shows a 54.5% chance of a 50 bps…
Filed under: News - @ August 10, 2024 12:16 am