Reuters Poll: Economists Expect US Federal Reserve Rate Cut in September

June 10, 2024: According to a Reuters poll, nearly 70% of economists anticipate that the US Federal Reserve will implement a rate cut in September. This expectation arises as global markets keenly watch the Fed’s upcoming interest rate decision on June 12. Notably, the Federal Reserve has paused rate changes seven consecutive times following 11 rate hikes.

Expert Opinions and Predictions:

1. Ed Yardeni, President of Yardeni Research:
   • Date: June 10, 2024
   • Outlook: Unlikely rate cuts this calendar year, but anticipates 1-2 cuts over the next 12 months.
2. James Knightley, Chief International Economist at ING:
   • Date: June 2, 2024
   • Outlook: Earliest rate cut expected in September, contingent on cooling core inflation, weakening consumer spending, and a slackening labour market.
3. Robert Sockin, Global Economist at Citi:
   • Date: May 21, 2024
   • Outlook: Predicts a moderate but resilient US economy, leading to slower inflation decline and likely resulting in two rate cuts—one in Q3 and another in Q4.
4. Fook Hien Yap, Senior Investment Strategist at Standard Chartered Bank:
   • Date: May 17, 2024
   • Outlook: Expects the Fed to cut rates twice this year—once in the third quarter and again in the fourth quarter, which would positively impact US market valuations.
5. CLSA:
   • Date: April 19, 2024
   • Outlook: Revised prediction for the first rate cut to November.

Summary

While a significant portion of economists foresee a rate cut in September, opinions among financial experts vary regarding the exact timing and frequency of the anticipated cuts. The general consensus points towards some easing of rates within the next 12 months, influenced by factors such as inflation trends, consumer spending patterns, and labor market conditions.

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