The US Federal Reserve (FED) has been keeping its policy rate at 5-5.50 percent for a long time, but will cut rates this year due to the decline in inflation. Analysts are certain that the FED will cut rates this month. The US Federal Reserve is expected to lower its policy rate, currently between 5.25-5.50 percent, at its September 17-18 meeting.
Fed Board Member Christopher Waller, in a speech at a university, said that it was important to start cutting interest rates this month due to risks in the labor market.
‘I would also support a bigger discount’
Waller, who also expressed an open mind about large-amount cuts, continued: “If the data supports cuts at future meetings, then I think consecutive cuts will be appropriate. If the data requires a larger cut, I will support that too. I was in favor of a front-loaded rate hike when inflation accelerated in 2022, and I will support a front-loaded cut now if necessary.”
‘The economy is not heading into recession’
Waller also commented on today’s better-than-expected nonfarm payrolls data “Current data no longer requires patience, but action,” he said. Waller said the economy was not heading into recession and that they had made significant progress in the fight against inflation.
New York Fed President John Williams said a more balanced economy opens the door to lower interest rates and that the entire course of action will be determined by how the economy performs. Williams said the Fed is ready to start the process of reducing interest rates.
Source: www.dunya.com
