Institution: Despite market fluctuations, it's unlikely that the Federal Reserve will urgently cut interest rates

Björn Jesch, DWS's global chief investment officer, said that despite recent market volatility, the Federal Reserve may continue its expected policy path. He stated in a report that it is unlikely for the Fed to react out of panic and he expects the central bank will try to avoid signaling major policy shifts such as cutting interest rates by 50 basis points or making emergency cuts between meetings. He anticipates that the Fed will stick to a gradual easing approach, starting from September and reducing interest rates by 25 basis points over several months. The possibility of a US economic recession cannot be ruled out but considering the overall strength of the economy and robust private sector balance sheets, even if there is a recession it could be mild. DWS does not believe a bear market is imminent but will closely monitor indicators reflecting systemic risk.