Big banks like JPMorgan Chase and Bank of America are predicting that the Federal Reserve will cut interest rates again in November, but this time by a smaller amount. The Fed already lowered rates by 0.5% last month, but these banks think a 0.25% cut is more likely this time around.
The US economy seems to be doing better than expected, with strong job growth and a decline in inflation. This positive news is leading many experts to believe that a “soft landing” is possible – meaning the economy can slow down without a full-blown recession.
JPMorgan’s chief economist, Michael Feroli, thinks the Fed will take a more gradual approach to rate cuts. He says the strong job market makes the Fed’s job easier, and they’ll likely continue lowering rates slowly unless there’s a big surprise in the November jobs report.
Bank of America’s economist, Aditya Bhave, agrees that a big rate cut isn’t needed anymore. He points to the strong job market and believes the economy is strong enough to handle a smaller rate cut.
New York Fed President John Williams also believes a soft landing is possible. He says the current economic conditions are good for keeping the economy and job market strong while also bringing inflation down.
The Fed’s own projections suggest a 0.25% rate cut in both November and December.
So, while the exact timing and size of future rate cuts might change, it seems likely that the Fed will continue to ease its monetary policy in the coming months. /p>
