Bank officials signal readiness to start interest rate-cutting cycle to ease pressure on households and businesses
Kamala Harris’s hopes of victory in the looming US presidential election have been given a boost by mounting expectations that the US Federal Reserve will cut interest rates from as early as September.
As Democrats gather for the party’s national convention in Chicago starting on Monday, economists on Wall Street said the world’s most powerful central bank was poised to begin a cycle of interest rate cuts before the end of the year.
After a rollercoaster month in financial markets amid fears of a potential US recession, a majority of economists polled by Reuters said they did not expect a downturn to materialise, and that the Fed would cut borrowing costs by 0.25 percentage points at each of its remaining meetings in 2024.
It comes after the heads of three regional Federal Reserve banks signalled growing readiness for the start of a rate-cutting cycle to help ease pressure on households and businesses from high borrowing costs.
The president of the Minneapolis Federal Reserve, Neel Kashkari, said it was appropriate to discuss potentially cutting interest rates from as early as September because of a weakening jobs market.
