KUALA LUMPUR, Aug 1 (Bernama) -- MIDF Amanah Investment Bank Bhd expects the US Federal Reserve (Fed) to begin reducing its Fed Funds Rate later in the second half (2H) of this year, potentially through one or two rate cuts.
The investment said broad moderation in US inflation suggests the Fed is moving closer to implementing rate cuts.
“This is based on signals from the Fed Chair that a rate cut may occur as early as the next Federal Open Market Committee (FOMC) meeting in September 2024.
“However, if inflation remains stubbornly high, the Fed may delay reducing its interest rate,” ” it said in a note today.
MIDF further indicated that a policy easing is likely this year, as there appears to be a reduced need for the highly restrictive policy setting, with inflation approaching the Fed’s two per cent target.
Meanwhile, Maybank Investment Bank Bhd has maintained its forecast for the Fed to cut rates by 50 basis points (bps) in 2024 and 100 bps in 2025.
“Attention will focus on job and inflation data and the Fed’s annual event before the FOMC meeting from Sept 17 to 18, 2024,” it said.
Maybank also highlighted that significant changes in the post-FOMC meeting statement were notable, especially concerning US job market conditions.
These adjustments in FOMC statements follow recent data showing an uptick in the unemployment rate, a slowdown in non-farm payroll growth, and a decrease in the inflation rate, the bank added.
-- BERNAMA
