Survey: Majority of Economists Expect the Fed to Cut Interest Rates in September, with Another Cut Later This Year

August 15th - The majority of economists surveyed by Reuters anticipate that the Federal Reserve will initiate the first interest rate cut this year in September. It is followed by another cut before the end of the year, which is regarded as the base case scenario. In the current market environment, concerns about the well-being of the U.S. economy are on the rise. Among the 110 respondents, 67 individuals (61%) foresee that the Fed will reduce the benchmark interest rate by 25 basis points to 4.0% - 4.25% in September, marking the first cut this year. This is an increase from 53% in the July survey, with one person expecting a 50 basis point hike. The remaining 42 participants believe that the Fed will maintain the interest rates unchanged. More than 60% of the respondents (68 out of 110) expect one to two rate cuts this year, similar to the previous month. However, there is no agreement on the level of the federal funds rate by the end of 2025. Furthermore, 68% of the respondents also anticipate that the independence of the Federal Reserve will not be significantly undermined during Powell's remaining tenure. (Jin10)