Federal Reserve Releases Latest Beige Book: Officials Hint at Rate Cuts Starting This Month, Possible Multiple Cuts in the Next 3-6 Months
The latest Beige Book released by the Federal Reserve shows that U.S. economic activity slowed in July and August, but overall economic activity remains in an expansion state. The Beige Book notes that consumer spending has slightly increased, but concerns among businesses regarding the economic outlook have risen, leading to a slowdown in business investment and hiring activities. At the same time, the Beige Book also mentions that inflation pressures have eased, but the labor market remains tight.
Federal Reserve Governor Waller mentioned in a speech that the Fed may begin to lower interest rates this month, and there may be multiple cuts in the next 3 to 6 months. This statement aligns with market expectations, as the market generally anticipates that the Fed will announce a rate cut at the September meeting. Additionally, Waller emphasized that the Fed will closely monitor economic data, including employment and inflation indicators, when formulating monetary policy.
Market analysts point out that the release of the Beige Book and the officials' speeches may impact the market, especially the stock and bond markets. Investors are closely watching the Fed's actions to gauge future interest rate trends. Despite the uncertainties, most analysts believe that the Fed's rate cuts will help support economic growth.
It is noteworthy that after the release of the Beige Book and the speeches of the Fed officials, market expectations for a rate cut in September have significantly increased. According to the latest data from CME’s “FedWatch” tool, the current market expectation for a 25 basis point cut in September has risen sharply to 99.7%.
Overall, the latest developments from the Federal Reserve provide important clues for the future direction of monetary policy. Investors should closely monitor the Fed's further actions to better seize investment opportunities.
