Expert Analyst Predicts When the FED Will Cut Interest Rates! "It Will Be Larger Than Expected"

According to an analyst, the FED's interest rate cut could be postponed to December, and this step could be larger than expected.

ING's Chief International Economist James Knightley stated that the FED will not rush to cut interest rates but may make a strong cut of 50 basis points towards the end of the year.

According to Knightley, the inflationary effects of the tariffs imposed by the Trump administration will restrict the Fed's options in the short term. However, the economist stated that these effects will be temporary and one-off, indicating that the Fed will find room to lower interest rates in December to support growth.

The US money markets are currently pricing in a high probability of an interest rate rebate in September, while Knightley approached these expectations with caution. According to the analyst, the FED may prefer to wait a bit longer for a larger rebate.

A similar assessment came from FED Board Member Christopher Waller. Speaking in the South Korean capital Seoul, Waller acknowledged that President Donald Trump's import tariffs could temporarily increase inflation, while stating that such price pressures could be ignored in policy-making. "I am in favor of ignoring the effects of tariffs on short-term inflation when determining monetary policy," said Waller, noting that a rate cut is still possible within this year.

*This is not investment advice.

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