Fed Expected to Signal Interest Rate Cut Amid Cooling Inflation and Slowing Job Growth

Washington D.C., District of Columbia United States of America
Annual inflation dipped to 3.0% in June, down from a two-decade high of 9.1% in June 2022
Core inflation fell to 3.3%, the lowest since April 2021
Federal Reserve expected to signal interest rate cut in September
Job growth averaged 177,000 a month for the past three months, down from a red-hot average of 275,000 a year ago
TD Securities expects Fed to cut rates by half a percentage point in September and another quarter-point in December
Unemployment rate inched up to 4.1% in June from 4.0% in May
Fed Expected to Signal Interest Rate Cut Amid Cooling Inflation and Slowing Job Growth

The Federal Reserve is widely expected to signal an interest rate cut as soon as September, following a series of indications from various economists and financial experts. The unemployment rate, which inched up to 4.1% in June from 4.0% in May due to more people looking for jobs, has not significantly impacted the resilience of the US economy according to Nancy Curtin, chief investment officer at Alti Tiedemann Global.

The Fed's benchmark short-term rate has stood at a 23-year high of 5.25% to 5.5% since July 2023 as the central bank waits for inflation to cool further. Annual inflation dipped in June to 3.0%, down from a two-decade high of 9.1% in June 2022, but still above the Fed's goal of 2%. Core inflation, excluding volatile food and energy prices, fell to 3.3%, the lowest since April 2021.

Most economists expect only hints from the Federal Reserve about a potential rate cut during its two-day policy meeting ending on Wednesday. Jerome Powell and other Fed officials have previously indicated that inflation is trending in the right direction, but recent data suggests that consumer spending may be slowing down.

Job growth has averaged 177,000 a month for the past three months, down from a red-hot average of 275,000 a year ago. TD Securities' Gennadiy Goldberg expects the Fed to cut rates by half a percentage point in September and another quarter-point in December.

The impact of an interest rate cut on borrowing costs for mortgages, auto loans, and credit cards could potentially boost the economy. However, it is important to note that a single rate reduction would not make a significant difference on its own.


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Confidence

85%

Doubts
  • Are economists accurately predicting a rate cut in September?
  • Is the unemployment rate truly not impacting the US economy?

Sources

95%

The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
(Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

Interest rate cut coming soon, but Fed likely won't tell you exactly when this week

USA Today Tuesday, 30 July 2024 00:00
  • Unique Points
    • Federal Reserve meeting in September is predicted to result in an interest rate cut
    • The unemployment rate inched up to 4.1% in June from 4.0% in May due to more people looking for jobs
  • Accuracy
    • A single rate cut won’t make much difference to the economy.
    • Financial markets expect three rate cuts this year: in September, November, and December.
    • Job growth has averaged 177,000 a month for the past three months
  • Deception (100%)
    None Found At Time Of Publication
  • Fallacies (100%)
    None Found At Time Of Publication
  • Bias (100%)
    None Found At Time Of Publication
  • Site Conflicts Of Interest (100%)
    None Found At Time Of Publication
  • Author Conflicts Of Interest (0%)
    None Found At Time Of Publication

75%

The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
(Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

Federal Reserve is edging closer to cutting rates. The question will soon be, how fast?

The Associated Press News Monday, 29 July 2024 07:00
  • Unique Points
    • The Federal Reserve is expected to signal a rate reduction as soon as September.
    • Job growth has averaged 177,000 a month for the past three months, down from a red-hot average of 275,000 a year ago.
  • Accuracy
    • ]The Federal Reserve is expected to signal a rate reduction as soon as September.[
    • Financial markets expect three rate cuts this year: in September, November, and December.
  • Deception (30%)
    The article contains selective reporting as it only reports details that support the author's position of the Federal Reserve potentially cutting interest rates. The author does not provide any counterarguments or mention any potential negative consequences of rate cuts. Additionally, there is emotional manipulation through phrases such as 'momentous shift' and 'potential boost to the economy'.
    • A single cut in the Fed’s key rate, now at roughly 5.3%, wouldn’t by itself make much difference to the economy. Financial markets widely expect it.
    • It’s a question of keen interest to both major presidential candidates, too.
    • Two years after launching an aggressive fight against inflation and one year after leaving its benchmark interest rate at a near-quarter-century high, the Federal Reserve is expected to signal this week that it will likely reduce borrowing costs as soon as September.
  • Fallacies (85%)
    The article contains several instances of appeals to authority and speculation. The author quotes various experts in the field of economics, but does not explicitly state whether they agree or disagree with their assessments. Additionally, the author makes statements about potential outcomes based on current trends and economic indicators, which can be subject to change. No formal fallacies were identified.
    • ]They want to be very gradual in how they pull back[.
    • ]It's a question of keen interest to both major presidential candidates, too.[
    • ]Futures markets have priced in a 64% likelihood that the Fed will cut rates three times this year[.
    • ]Any signal that the Fed will rapidly cut rates could boost the economy and potentially lift Vice President Kamala Harris's election prospects[.
    • ]Former President Donald Trump has argued that the Fed shouldn't cut rates until its next meeting, in November[.
    • ]As recently as last month, Fed officials had collectively forecast just one rate reduction in 2024 and four in 2025 and 2026[.
    • ]How the economy fares in the coming months will likely determine how quickly the Fed acts[.
    • ]It's not yet clear whether that cooling reflects a return of the economy to a more sustainable, less inflationary, post-pandemic period of growth or whether the cooling will continue until the economy slides into a recession[.
    • ]Chair Jerome Powell and other Fed officials have underscored that they're paying nearly as much attention to the threat posed by a hiring slowdown as they are to inflation pressures[.
    • ]And on Thursday the government reported that the economy grew at a healthy 2.8% annual rate in the April-June quarter[.
    • ]This week, though, the Fed may change the statement it issues after each meeting in ways that could hint that a rate cut is coming soon[.
    • ]If inflation remains below the Fed's year-end target, that could justify cutting borrowing rates more than the single reduction the policymakers forecast in June[.
    • ]Fed officials, though, are expected to focus much more on the three-month and six-month annualized inflation averages in the coming months[.
  • Bias (100%)
    None Found At Time Of Publication
  • Site Conflicts Of Interest (100%)
    None Found At Time Of Publication
  • Author Conflicts Of Interest (0%)
    None Found At Time Of Publication

95%

The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
(Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

Fed to Start Cutting Rates Heading Into September, Curtin Says

Bloomberg News Now Tuesday, 30 July 2024 11:18
  • Unique Points
    • Nancy Curtin, chief investment officer at Alti Tiedemann Global, expects the Federal Reserve to start cutting interest rates in September.
    • Curtin does not believe that cracks in US consumer data signal the end of resilience in the country.
  • Accuracy
    • Federal Reserve meeting in September is predicted to result in an interest rate cut
    • The Fed's benchmark, short-term rate has been at a high of 5.25% to 5.5% since July 2023
  • Deception (100%)
    None Found At Time Of Publication
  • Fallacies (100%)
    None Found At Time Of Publication
  • Bias (100%)
    None Found At Time Of Publication
  • Site Conflicts Of Interest (100%)
    None Found At Time Of Publication
  • Author Conflicts Of Interest (0%)
    None Found At Time Of Publication