Column: FRB interest rate cut timing, unemployment rate a “disruptive factor”
2024/7/29 5:56 PM GMT+9 (some excerpts)
If the US economy were a snapshot, Federal Reserve (FRB) Chairman Powell should place a photo that cuts out “now” on his display shelf
While the US economy's gross domestic product (GDP) growth rate for the second quarter is a strong figure of 2.8% per annum, the important inflation index has calmed down, and conditions for a “soft landing” are in place. There is no doubt that, at least temporarily, the FRB's response to the current inflation cycle will win a certain amount of praise. The timing seems good for the Federal Open Market Committee (FOMC) to begin cutting interest rates in September. However, the current high interest rates will inevitably have an impact on the economy, and by the time the FRB turns to interest rate cuts, unemployment and consumption will worsen, and economic recovery may be threatened.
While the US economy's gross domestic product (GDP) growth rate for the second quarter is a strong figure of 2.8% per annum, the important inflation index has calmed down, and conditions for a “soft landing” are in place. There is no doubt that, at least temporarily, the FRB's response to the current inflation cycle will win a certain amount of praise. The timing seems good for the Federal Open Market Committee (FOMC) to begin cutting interest rates in September. However, the current high interest rates will inevitably have an impact on the economy, and by the time the FRB turns to interest rate cuts, unemployment and consumption will worsen, and economic recovery may be threatened.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
Read more
Comment
Sign in to post a comment
