The post Delayed Action from U.S. Fed Could Force Larger Rate Cuts, Warns Deutsche Bank Strategist appeared on BitcoinEthereumNews.com.

Delayed Action from U.S. Fed Could Force Larger Rate Cuts. A recent note from Jim Reid, a strategist at Deutsche Bank, has raised concerns about the potential economic consequences if the U.S. Federal Reserve delays cutting interest rates in response to an economic slowdown. In his note, dated September 9, Reid emphasized that a decline in the U.S. non-farm payroll report often signals an impending economic downturn with little advance warning. He cautioned that if the Federal Reserve does not act quickly enough, it may be forced to implement larger rate cuts later to regain control of the situation. Reid’s warning aligns with insights from Adam Button, a currency analyst at ForexLive, who echoed the concern that a delayed response from the Fed could make it more difficult to prevent a deeper downturn. Reid specifically suggested that if the Fed is slow to act, it could eventually be forced to cut interest rates by as much as 50 basis points at a time to stabilize the economy. The Risks of Delayed Action by the Federal Reserve The U.S. Federal Reserve’s decisions on interest rates have a profound impact on the economy, particularly during times of economic uncertainty. According to Jim Reid, any delay in responding to worsening job market data, such as a declining non-farm payroll report, could exacerbate an economic downturn. Historically, a sharp decline in this report has signaled the onset of a recession, leaving the Fed little time to act. Reid argues that by hesitating to cut rates when job losses begin to accelerate, the Fed could find itself in a situation where it needs to make larger cuts later. Larger cuts, such as 50 basis points or more, could be necessary to offset the economic damage caused by the delay, making it more challenging for the…

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Filed under: News - @ September 10, 2024 2:17 am