Economist: The Federal Reserve May Significantly Cut Interest Rates in December

According to a report by Jinse Finance, ING economist Knightley stated that the Federal Reserve might wait until December to cut interest rates, opting for a significant reduction of 50 basis points. The economist noted that due to the inflationary impact of tariffs, the Fed will not cut rates immediately. However, the effect of tariffs on prices will be one-time. This will allow the central bank to boost the slowing economy later through rate cuts. The U.S. money market is currently pricing in a high probability of a rate cut in September. However, Knightley mentioned that the Fed might also wait longer and choose a larger rate cut in December.