The Federal Reserve this month might frighten financial markets and convey the incorrect idea about the imminence of a recession.
This occurs at a time when investors are intently observing economic data for signals about the magnitude of the expected rate shift by U.S. central bank policymakers, who are largely expected to begin decreasing interest rates when they meet on September 17–18.
George Lagarias, chief economist at Forvis Mazars, stated on Thursday to CNBC that he is “firmly” in favour of a quarter-point drop in interest rates, even if no one can guarantee the extent of the Fed’s cut at its upcoming meeting.
The 50 [basis point] cut is not urgently needed, The economy and markets may receive the incorrect message from the 50 [basis point] cut.
“You know, that could be a self-fulfilling prophecy, and it might send a message of urgency,” he went on. There are 0.01 percentage points in a basis point.
Source (CNBC)
