Latest Updates on Federal Reserve Interest-Rate Cut and Economic Activity
The Federal Reserve interest-rate cut is looming as fresh signs of abating inflation and simmering economic activity come to light. Economists anticipate a 0.1% rise in the personal consumption expenditures price index in June, which would bring core inflation to its slowest pace of the year, below the Fed’s 2% target. This follows forecasts of a 1.9% annualized GDP rate for the second quarter, marking the slowest consecutive quarters of economic activity in two years.
With the labor market cooling, personal income growth slowing, and consumers being more cautious in their spending, the stage is set for a potential rate cut by the Fed in September. While the chances of a cut in July are low, investors are feeling confident about a quarter-point reduction in September. The upcoming economic data calendar includes reports on new and existing home sales, durable goods orders, and central bank decisions across various regions.
In Asia, China’s central bank is expected to maintain its benchmark lending rates amid anemic growth data, while other countries like Australia, Japan, and India will release important economic indicators. In Europe, the ECB’s survey of inflation expectations and releases of consumer confidence and PMI gauges will provide insights into the region’s economic health. Africa will see budget announcements in countries like Ghana and South Africa, while major central bank decisions are anticipated.
Latin America’s focus will be on mid-July inflation data in economies like Mexico and Brazil, with central bankers closely monitoring the trends ahead of potential rate decisions. Finance ministers and central bankers from G-20 nations will convene in Rio de Janeiro to discuss important economic issues.Overall, the economic landscape seems poised for potential rate adjustments and policy decisions in the coming weeks.