A recent Reuters poll indicates that the majority of economists anticipate the Federal Reserve will opt for a cautious approach to interest rate reductions, implementing three cuts of 25 basis points each throughout the remainder of 2024. This sentiment prevails despite recent data showing a softening labor market.
The survey, conducted on September 10th, revealed that only a small minority (nine out of 101) of economists surveyed foresee a more aggressive 50 basis point cut at the upcoming Fed meeting next week.
Stephen Stanley, chief U.S. economist at Santander Bank, suggested that the recent employment report, while weak, wasn’t alarming enough to warrant a drastic rate cut. He further pointed to comments from Fed officials Williams and Waller, whose relatively optimistic economic assessments support the likelihood of a 25 basis point reduction.
The poll also showed growing confidence in further rate cuts later in the year. 65 of the 95 economists surveyed now expect two additional 25 basis point cuts in November and December, up from 55 out of 101 who held this view last month.
