When Federal Reserve officials meet next week, they are expected to clear the way for a July interest rate cut by downgrading their economic forecast, tweaking the language in their statement and and reducing their interest rate forecasts.
There's a growing group of economists and investors who expect a mid-summer rate cut, at the July 30-31 meeting. There are also those who expect the Fed to wait until September, considering more data before cutting rates. Then there are a few, like economists at Goldman Sachs, who expect no cut at all this year.
Barclays Chief U.S. economist Michael Gapen moved forward his forecast for a first rate cut to July, from September, after last Friday's weak May employment report of just 75,000 nonfarm payrolls. He expects the Fed to use more fire power than some economists and expects it to start with a half percent rate cut, rather than a quarter point cut.
Fed funds futures Friday were signaling market expectations of about a 20% chance of a rate cut next week and about 80% for July. The Fed last raised interest rates in December when it moved the range for fed funds futures to 2.25 to 2.50%.
Fed has ruined the financial world
They're wrong - FED needs more room to cut cause their credibility and management of the economy is shot. They wont cut till September or December...
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