Survey: Economists predict a faster slowdown in the US labor market, with the Federal Reserve likely to significantly cut interest rates

Monthly surveys show that economists believe the faster-than-expected cooling of the US labor market will prompt the Federal Reserve to cut interest rates faster and more aggressively. Economists surveyed in August indicated that the unemployment rate is expected to peak at 4.4% by the end of this year and remain at that level until mid-2025, with new job additions likely slightly higher than the previous month. This is expected to lead to a cumulative 75 basis points rate cut by the end of the year, with the pace of rate cuts accelerating further into 2026. (Bloomberg)