Michael Feroli, chief U.S. economist at J.P. Morgan Securities LLC, was interviewed by Bloomberg Television in New York, U.S., on Tuesday, March 6, 2018.
Christopher Goodney | Bloomberg | Getty Images
JPMorgan’s Michael Feroli said the Fed should cut interest rates by 50 basis points at its September meeting.
“We think there’s a good case to be made that they should move back to neutral as soon as possible,” the firm’s chief U.S. economist told CNBC’s “Squawk on the Street” on Thursday, adding that the central bank’s neutral policy setting is the highest point It’s about 4 o’clock. “We think there are strong reasons to accelerate the pace of rate cuts.”
according to CME FedWatch ToolTraders see a 39% chance that the Fed’s target range for the federal funds rate will be lowered by half a percentage point to 4.75% to 5% from the current range of 5.25% to 5.50%. A drop of a quarter percentage point to a range of 5% to 5.25% shows a probability of about 61%.
Feroli also said: “If you wait until inflation has returned to 2%, then you may have waited too long.” “While inflation is still slightly above target, the unemployment rate may be slightly higher than they think it is sufficient.” Employment levels. There are risks to both employment and inflation right now, and you can always turn those risks around if they turn out to be true.
His comments came as August was the weakest month for private employment growth since January 2021.
Still, Feroli said he didn’t think the economy was “collapsing.”
The economist continued: “If the economy collapses, I think you would have a case to raise rates above 50 at the next FOMC meeting.”
The Federal Reserve will make a decision on interest rate trends on September 17th and 18th.
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