This month, the financial world is focused on the potential for the Federal Reserve System to lower interest rates. There is a high probability that the Fed may make a decision to cut rates in September.
Jerome Powell's Statements
Fed Chairman Jerome Powell recently made mild statements at an event in Jackson Hole that fuel expectations for a change in monetary policy. Consequently, market participants are pricing in a 90% chance of a 25 basis point cut.
Standard Chartered Analysts' Forecasts
Analysts at Standard Chartered also stated they expect significant interest rate cuts in September. They noted that the current policy rate is at 4.25-4.50%, and expressed confidence in a reduction of 50 basis points, citing labor market data.
Economic Data Impact on Fed Decisions
According to analysts, the rapidly cooling labor market has led to a revision of the Fed's forecast, which initially anticipated a 25 basis point cut. The worsening labor market situation has increased the likelihood of a larger cut.
The overall atmosphere of anticipation ahead of the Fed's meeting indicates possible changes in monetary policy, which could significantly impact the country's economic situation.
