On March 6, 2018, Michael Feroli, chief U.S. economist at J.P. Morgan Securities, was interviewed by Bloomberg TV in New York.
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JPMorgan’s Michael Feroli said the Fed should cut interest rates by 50 basis points at its September meeting.
“We think there’s a strong case that they should move back to neutral as quickly as possible,” the firm’s chief U.S. economist told CNBC.quack in the streetOn Thursday, he added that the central bank’s neutral policy setting would peak at around 4%, or 150 basis points below current levels.
according to CME Group Fed Watch ToolTraders see a 39% chance that the Fed’s target range for the federal funds rate will be lowered by half a percentage point to 4.75% to 5% from the current range of 5.25% to 5.50%. If it drops a quarter of a percentage point to 5% to 5.25%, the probability is about 61%.
Feroli also said: “If you wait until inflation has returned to 2%, then you may have waited too long.” “While inflation is still slightly above target, the unemployment rate may be slightly higher than they think it is sufficient.” Employment levels. There are risks to both employment and inflation right now, and you can always turn those risks around if they turn out to be true.
His comments came in August weakest month Private employment growth since January 2021. rose slightly to 4.3% July, triggered recession indicators called Sam’s Rules.
Still, Feroli said he didn’t think the economy was “collapsing.”
The economist continued: “If the economy collapses, I think you would have a case to raise rates above 50 at the next FOMC meeting.”
The Federal Reserve will make a decision on interest rate trends on September 17th and 18th.
