US Fed rate cut: The recent downward revision of US jobs data, along with the minutes from the latest FOMC (Federal Open Market Committee) meeting, has strengthened expectations of a rate cut in September. Many experts are certain that the Fed will cut benchmark interest rates within the next few weeks. The next US FOMC meeting is scheduled for September 17-18.
On Wednesday, the US Labor Department reported that employers added far fewer jobs than initially estimated in the year through March. According to a Reuters report, the Labor Department revised its estimate for total payroll employment from April 2023 to March 2024, lowering it by 8,18,000 jobs. This reduction means that average monthly job gains during this period were about 1,74,000, down from the previously reported 2,42,000.
Besides, the Fed’s July 30-31 meeting minutes showed some policymakers favoured rate cuts last month. Although the US Fed kept the benchmark interest rate unchanged in the 5.25-5.50 per cent range in its July meeting, Fed Chair Jerome Powell sounded dovish and said a rate cut was possible in the next policy meeting.
The question now is the magnitude of the rate cut. Some experts expect the Fed to cut rates by 50 bps in September, while some say the Fed will cut rates by 25 bps in each of its next three policy meetings scheduled in September, November and December.
Mint spoke to 10 experts to gather their…
