According to the latest survey of economists by foreign media, most economists expect the Federal Reserve to cut interest rates by 25 basis points at each of the remaining three meetings in 2024, a larger cut than the one forecast last month. However, they also said the likelihood of a recession in the United States is very low. Product structure, 10-30 billion yuan products operating income of 401/1288/60 million yuan respectively.

Economists' expectations of a Fed rate cut have shifted against a backdrop of weak July non-farm payrolls data, prompting interest rate futures traders to predict a cut of up to 120 basis points this month. A massive but short-lived sell-off in the market was also a driving factor behind radical expectations of rate cuts, related to the large-scale liquidation of leveraged positions due to a sudden sharp rise in the yen.

Investors also said that the large but short-lived sell-off in the market was a driving factor behind the radical expectations of rate cuts, which were related to the large-scale liquidation of leveraged positions due to a sudden sharp rise in the yen.

Despite hints from some Fed officials that they may cut interest rates, most economists surveyed by foreign media from August 14 to 19 did not expect the Fed to cut rates quickly. Recent data, including strong retail sales data last week, show that although inflation has declined somewhat, economic performance is relatively good.

54% of respondents (55 out of 101) predicted that the Federal Reserve would cut the federal funds rate by 25 basis points in September, November, and December, respectively, lowering the rate range to 4.50% to 4.75% by the end of 2024.

More than a third (34 of 55) of respondents expected the Fed to cut interest rates twice this year, and one respondent predicted that the central bank would only cut interest rates once this year. Eleven economists expect the Fed to cut interest rates by 100 basis points or more this year.

Jonathan Millar, senior economist at Barclays US, said: "The basis for our Fed rate cut is mainly because inflation is declining, not because economic activity is slowing down... We see the economy as quite resilient and growing at close to a trend pace, in which case we think inflation will only gradually decline."

He added,"The labor market is performing well. It is cooling down gradually, but we don't expect a real substantive weakness. The unemployment rate may rise slightly by about 10 percentage points from its current level. They (the Fed) have no reason to panic."

The unemployment rate is expected to remain around its current level of 4.3% until 2026. According to median forecasts, inflation is expected to fall slightly in the next two years. However, economists expect all inflation indicators, including CPI, core CPI, PCE, and core PCE, to remain above 2% until at least 2026.

Although it has recently declined, wage growth is still in the range of 3.0% to 3.5%, which is considered consistent with the Fed's 2% inflation target.

Economists expect the Fed to cut interest rates by 25 basis points in each of the four quarters of 2025. Currently, the market expects the Fed to cut interest rates by about 200 basis points by the end of the third quarter of 2025.

The possibility of an economic recession is very low.

The second quarter GDP growth rate in the United States was 2.8%, far higher than economists' expectations of 2%. The survey predicts that the average GDP growth rate in the United States this year will be 2.5%, higher than the Fed's current non-inflationary growth rate of 1.8%.

Two-thirds of those surveyed raised their expectations for US economic growth in 2024, predicting that the economy will grow by 1.8% next year.

Economists surveyed generally expect the US economy to expand at the rate of its trend growth rate at least until 2027. The median forecast from a small sample of viewpoints is that the risk of a recession is only 30%, a prospect that has not changed much since the beginning of this year.

Michael Gape, chief economist at the Bank of America in the United States, said,"We don't believe the economy is about to slump and prompt the Fed to make a significant rate cut."

He added,"There is reason to believe that the July non-farm employment report was affected by the weather, so this is a false signal about the labor market and economic conditions, and we believe that subsequent data will confirm this."

Editor/ping