The US Federal Reserve is expected to keep interest rates unchanged this week but may signal a rate cut in September, influenced by slowing inflation and economic growth, with potential political implications amid the upcoming presidential election.
US Fed Expected to Signal September Rate Cut Amid Slowing Inflation and Steady Economic Growth
According to the report of AFP, the US Federal Reserve is expected to keep its interest rates the same this week but might suggest that cuts are coming in September. Even though inflation is slowing down and the economy is growing well, the Fed is careful not to lower rates too soon. Most experts don’t think the Fed will cut rates in July but believe September is likely.
Fed Chair Jerome Powell is expected to use the upcoming meeting to prepare for a possible rate cut in September and will likely talk more about this at the Jackson Hole meeting next month. While many experts think a September cut will happen, some, like those from Bank of America, think it might not come until December. However, futures traders are sure the cut will happen by mid-September.
READ ALSO: $200,000 in Scholarships Secured: The Scholarship Academy Empowers Low-Income Students to Pursue Higher Education!
85% Chance of Rate Cut in September: Fed Poised to Maintain Current Rates, But Hints at Potential Future Cuts Amid Economic Growth and Disinflation (PHOTO: The Business Post)
Potential September Rate Cut by Fed Could Impact Presidential Election Dynamics Between Harris and Trump
A rate cut in September could draw the Fed into the presidential election campaign between Vice President Kamala Harris and former President Donald Trump. Trump has criticized Powell and suggested he might not reappoint him if he wins. Powell has said the Fed makes decisions based on data, not politics. Experts expect at least two rate cuts this year, with December being a possible time for the second one.
READ ALSO: 50,000 U.S. Farmers Demand Changes to Tax Credit Rules to Support Domestic Biofuel Production
