Pulles: The Federal Reserve is expected to cut interest rates by 50 basis points this week

According to the Wise Finance APP, Blerina Uruci, Chief US Economist at PwC, published a forward-looking commentary on this week's Federal Reserve interest rate meeting. It is expected that the Federal Open Market Committee (FOMC) will cut interest rates by 50 basis points at the September meeting, which is a difficult decision.

Given the proximity to the Federal Reserve's announcement of its interest rate decision, there is an unusually high level of uncertainty about the extent of policy easing. This level of uncertainty contradicts Chairman Powell's earlier remarks, where he indicated that the timing and scale of the first rate cut in this cycle are significant, which may imply that the Fed will clearly communicate its first rate cut.

Furthermore, around the time of Powell's speech at the global central bank meeting, the Fed also conveyed that it would cut rates by 25 basis points at each meeting this year to address recent cooling in the labor market and slowing inflation. The lack of communication from the FOMC before the blackout period did not indicate a 50 basis point rate cut, causing investors to worry about how the FOMC will interpret labor market data and their response to further increases in the unemployment rate.

Over the next 12 months, the Fed may cut rates by around 125 to 150 basis points, while market pricing reflects a 250 basis point rate cut. Additionally, if the Fed acts quickly and further relaxes the financial environment after the September meeting, this will provide further support to the economy and prevent a slowdown