JPMorgan Chase forecasts that the U.S. Federal Reserve is unlikely to lower interest rates at the September meeting despite signals from Chairman Powell.
A report from investment bank JPMorgan indicates that there is a clear divide in opinions within the Federal Open Market Committee (FOMC) regarding interest rate cuts, although some members are increasingly leaning towards a looser policy.
MAIN CONTENT
JPMorgan Chase predicts that the Fed is unlikely to lower interest rates at the September FOMC meeting.
Internal conflicts within the FOMC regarding interest rate cuts have emerged.
The voice in favor of lowering interest rates has increased thanks to the presence of Steven Miran.
What does JPMorgan Chase predict about the Fed's interest rate policy at the September meeting?
According to JPMorgan Chase's report, the Fed is unlikely to make a decision to cut interest rates at the September FOMC meeting, even though Chairman Jerome Powell has signaled positively about this possibility. This forecast is based on in-depth analysis of recent moves and statements from FOMC members.
This stems from the current economic situation, along with the reaction of financial markets and ongoing high inflation pressures, making the decision to lower interest rates inappropriate at this time. JPMorgan Chase assesses a more cautious monetary policy trend as there are not yet strong enough signs to change quickly.
As a result, the Fed is forecasted to maintain interest rates or wait for more economic data before taking action, aiming to balance growth and controlling inflation.
Why is there internal disagreement within the FOMC regarding interest rate cuts?
A report from JPMorgan Chase emphasizes that the FOMC is facing significant internal conflicts regarding interest rate policy. Some members remain cautious, fearing that uncontrolled inflation could harm the economy if rates are lowered too soon.
On the contrary, members leaning towards a more flexible policy wish to cut interest rates to support economic growth, especially as there are signs of a slowing recovery. This diversity of views reduces the likelihood of reaching a consensus decision.
This internal debate reflects the Fed's challenge in balancing inflation control and promoting sustainable growth.
What is the impact of adding Steven Miran to the FOMC?
Steven Miran's joining the FOMC is seen as a driving force making the voice in favor of looser monetary policy become stronger. Mr. Miran leans towards cutting interest rates to support economic growth in the context of many global economic risks.
His presence increases the proportion of members supporting interest rate cuts but is still not enough to create consensus within the entire committee. This leads to the possibility that the decision may not be unanimous and may require prolonged debate.
Thus, it is clear that the trend favoring a looser policy is increasing but is not yet strong enough to replace the prevailing cautious view.
“The diversity of views on monetary policy within the FOMC complicates the possibility of a rate cut even in the September meeting.”
– JPMorgan Chase, Financial Market Analysis Report, August 2023
Frequently Asked Questions
Will the Fed really cut interest rates at the September meeting?
JPMorgan Chase predicts that this possibility is low due to ongoing internal conflicts and still significant inflation pressures.
What causes the lack of consensus within the FOMC on interest rate policy?
The main reason is the difference in assessing inflation pressures and the need to support economic growth.
What influence does Steven Miran have on the Fed's policy?
He is a member leaning towards lowering interest rates, helping to increase the voice in favor of a looser stance within the FOMC but has not yet achieved a majority.
What will the Fed do if it does not cut interest rates in September?
The Fed may maintain interest rates or wait for more economic data to decide in future meetings.
What is the impact of keeping interest rates unchanged on financial markets?
This outcome will maintain current credit conditions, limiting excessive volatility in the money and securities markets.
Source: https://tintucbitcoin.com/jpmorgan-chase-fed-kho-ha-lai-suat/
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