Economists Predict Federal Reserve's First Interest Rate Cut in September

According to Odaily, a survey of 116 economists revealed that 74 of them predict the Federal Reserve will make its first interest rate cut of 25 basis points in September. Only five economists forecast a rate cut in July, a decrease from 11 in a May survey. No one predicted a rate cut in June. Oscar Munoz, Chief US Macro Strategist at TD Securities, stated that the Federal Reserve is in a favorable position considering the current monetary policy's constraints on the economy. Out of the 116 respondents, 68 predicted two rate cuts this year, roughly consistent with last month's survey. With persistent high inflation, particularly the PCE price index, and extremely low unemployment rates, the possibility of an early rate cut is slim. The median forecast shows that inflation indicators such as CPI, core CPI, PCE, and core PCE are not expected to reach 2% until at least 2026. The unemployment rate is expected to remain close to the current 3.9% until at least 2027, indicating that the labor market will continue to be tight.