Institutions: The Federal Reserve will cut interest rates in an environment of high inflation

MetaEraSep 5, 2025
#Macro
On September 5th (UTC+8), due to the rapid cooling of US non-farm payroll data, it has become very difficult for the Federal Reserve to avoid cutting interest rates this month. After a dismal jobs report in August, the futures market is pricing in a 98.00% probability of a 25 basis point rate cut by the Fed in September, and expectations of a 50 basis point cut are also beginning to emerge. However, cutting interest rates may be a riskier operation. Pallas Capital analyst Rich Mullen wrote, "It is unusual for the Fed to cut rates in a high inflation environment. The Fed's preferred inflation gauge is moving away from, not towards, its 2.00% target." (Source: Jinshi) [MetaEra]
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Institutions: The Federal Reserve will cut interest rates in an environment of high inflation

MetaEraSep 5, 2025
#Macro
On September 5th (UTC+8), due to the rapid cooling of US non-farm payroll data, it has become very difficult for the Federal Reserve to avoid cutting interest rates this month. After a dismal jobs report in August, the futures market is pricing in a 98.00% probability of a 25 basis point rate cut by the Fed in September, and expectations of a 50 basis point cut are also beginning to emerge. However, cutting interest rates may be a riskier operation. Pallas Capital analyst Rich Mullen wrote, "It is unusual for the Fed to cut rates in a high inflation environment. The Fed's preferred inflation gauge is moving away from, not towards, its 2.00% target." (Source: Jinshi) [MetaEra]
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