The United States Federal Reserve (Fed) is preparing to reduce its interest rates again, amid an uncertain economic outlook marked by the partial government shutdown (shutdown), which has paralyzed the dissemination of key indicators.
Even without recent official data on employment, inflation or consumer spending, the market anticipates a drop of 0.25 percentage points, which would place rates in a range of 3.75% to 4%, according to the monitoring of the tool FedWatch of CME.
On Wednesday the Fed would announce its position on interest rates
The decision, scheduled for Wednesday, reflects the central bank’s dilemma between containing still high inflation – 3% annually in September – and stopping the deterioration in employment, which shows signs of slowing with an unemployment rate of 4.3% in August.
Analysts Oxford Economics They maintain that the economic risk “is greater on the labor front than on the inflation front,” which is why the Fed would opt for a new cut, even with prices above the 2% target.
According to Joseph Gagnonresearcher at the Peterson Institute for International Economics (Pie), the Fed maintains a “restrictive” stance, but seeks to balance the temporary persistence of inflation with the structural weakness of the labor market.
The recent dutyhe pointed out, only cause temporary price increases, while the loss of dynamism in contracting could be more lasting.
The chief economist of KPMGDiane Swonk, warned that the institution also faces the challenge of managing the liquidity of the financial markets and a balance that exceeds 6.6 trillion dollars, after having reached a peak close to 9 trillion in 2022.
In the event of a further economic cooling, the Fed could resort again to quantitative stimulus measures, injecting liquidity through asset purchases, as it did during the 2008 crisis and the pandemic.
Swonk predicts that in 2026 the central bank could “easing more strongly,” bringing rates below the neutral level.
For now, while the US economy advances blindly due to the lack of official information, the markets are cautiously observing the signals it emits. Jerome Powellpresident of the Fedabout the monetary direction of the coming months.
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