Solutions For RealSolutions For Real
  • Home
  • News
  • Personal Finance
    • Savings
    • Banking
    • Mortgage
    • Retirement
    • Taxes
    • Wealth
  • Make Money
  • Budgeting
  • Burrow
  • Investing
  • Credit Cards
  • Loans

Subscribe to Updates

Get the latest finance news and updates directly to your inbox.

Top News

Scammers Are Stealing Billions From Elders — And They’re Getting Better At It

June 14, 2025

Surveillance Nation: Who Else Has a File on Your Finances?

June 14, 2025

These Six-Figure Jobs Value Competence, Not Credentials

June 14, 2025
Facebook Twitter Instagram
Trending
  • Scammers Are Stealing Billions From Elders — And They’re Getting Better At It
  • Surveillance Nation: Who Else Has a File on Your Finances?
  • These Six-Figure Jobs Value Competence, Not Credentials
  • Inspiring Quotes From Brian Wilson of The Beach Boys
  • Here’s Why You Should Be Wary Of 401(k) Crypto Options
  • I’ve Stockpiled 3 Years of Food and More. Here Is My Story.
  • 6 Tips for How to Follow up on a Job Application (With Examples)
  • How a 12-Year-Old’s Side Hustle Makes Nearly $50,000 a Month
Sunday, June 15
Facebook Twitter Instagram
Solutions For RealSolutions For Real
Subscribe For Alerts
  • Home
  • News
  • Personal Finance
    • Savings
    • Banking
    • Mortgage
    • Retirement
    • Taxes
    • Wealth
  • Make Money
  • Budgeting
  • Burrow
  • Investing
  • Credit Cards
  • Loans
Solutions For RealSolutions For Real
Home » Federal Reserve will opt for slow policy easing as there’s ‘still work to do’ on inflation, Fitch says
News

Federal Reserve will opt for slow policy easing as there’s ‘still work to do’ on inflation, Fitch says

News RoomBy News RoomSeptember 13, 20240 Views0
Facebook Twitter Pinterest LinkedIn WhatsApp Reddit Email Tumblr Telegram

The U.S. Federal Reserve’s easing cycle will be “mild” by historical standards when it starts cutting rates at its September policy meeting, ratings agency Fitch said in a note.

In its global economic outlook report for September, Fitch forecast 25-basis-point cut each at the central bank’s September and December meeting, before it slashes rates by 125 basis points in 2025 and 75 basis points in 2026.

This will add up to a total 250 basis points of cuts in 10 moves across 25 months, Fitch noted, adding that the median cut from peak rates to bottom in previous Fed easing cycles going up to the mid-1950s was 470 basis points, with a median duration of 8 months.

“One reason we expect Fed easing to proceed at a relatively gentle pace is that there is still work to do on inflation,” the report said.

This is because CPI inflation is still above the Fed’s stated inflation target of 2%.

Fitch also pointed out that the recent decline in the core inflation — which excludes prices of food and energy — rate mostly reflected the drop in automobile prices, which may not last.

U.S. inflation in August declined to its lowest level since February 2021, according to a Labor Department report Wednesday.

The consumer price index rose 2.5% year on year in August, coming in lower than the 2.6% expected by Dow Jones and hitting its lowest rate of increase in 3½ years. On a month-on-month basis, inflation rose 0.2% from July.

Core CPI, which excludes volatile food and energy prices, rose 0.3% for the month, slightly higher than the 0.2% estimate. The 12-month core inflation rate held at 3.2%, in line with the forecast.

Fitch also noted that “The inflation challenges faced by the Fed over the past three and a half years are also likely to engender caution among FOMC members. It took far longer than anticipated to tame inflation and gaps have been revealed in central banks’ understanding of what drives inflation.”

Dovish China, hawkish Japan

In Asia, Fitch expects that rate cuts will continue in China, pointing out that the People’s Bank of China’s rate cut in July took market participants by surprise. The PBOC cut the 1-year MLF rate to 2.3% from 2.5% in July.

“[Expected] Fed rate cuts and the recent weakening of the US dollar has opened up some room for the PBOC to cut rates further,” the report said, adding that that deflationary pressures were becoming entrenched in China.

Fitch pointed out that “Producer prices, export prices and house prices are all falling and bond yields have been declining. Core CPI inflation has fallen to just 0.3% and we have lowered our CPI forecasts.”

It now expects China’s inflation rate to bet at 0.5% in 2024, down from 0.8% in its June outlook report.

The ratings agency forecast an additional 10 basis points of cuts in 2024, and another 20 basis points of cuts in 2025 for China.

On the other hand, Fitch noted that “The [Bank of Japan] is bucking the global trend of policy easing and hiked rates more aggressively than we had anticipated in July. This reflects its growing conviction that reflation is now firmly entrenched.”

With core inflation above the BOJ’s target for 23 straight months and companies prepared to grant “ongoing” and “sizable” wages, Fitch said that the situation was quite different from the “lost decade” in the 1990s when wages failed to grow amid persistent deflation.

This plays into the BOJ’s goal of a “virtuous wage-price cycle” — which boosts the BOJ’s confidence that it can continue to raise rates towards neutral settings.

Fitch expects the BOJ’s benchmark policy rate to reach 0.5% by the end of 2024 and 0.75% in 2025, adding “we expect the policy rate to reach 1% by end-2026, above consensus. A more hawkish BOJ could continue to have global ramifications.”

Read the full article here

Share. Facebook Twitter Pinterest LinkedIn Tumblr Email

Related Articles

Lucid shares tumble following public offering of nearly 262.5 million shares

News October 17, 2024

Harris distances herself from Biden, bashes Trump in tense Fox News interview

News October 17, 2024

Alibaba’s international arm says its new AI translation tool beats Google and ChatGPT

News October 16, 2024

I bought a $54,000 abandoned house in Japan and turned it into a luxury Airbnb—take a look inside

News October 16, 2024

Trump’s crypto coin goes on sale with Election Day just three weeks out

News October 15, 2024

Cramer’s Lightning Round: Uranium Energy is ‘the real deal’

News October 15, 2024
Add A Comment

Leave A Reply Cancel Reply

Demo
Top News

Surveillance Nation: Who Else Has a File on Your Finances?

June 14, 20250 Views

These Six-Figure Jobs Value Competence, Not Credentials

June 14, 20250 Views

Inspiring Quotes From Brian Wilson of The Beach Boys

June 14, 20250 Views

Here’s Why You Should Be Wary Of 401(k) Crypto Options

June 13, 20250 Views
Don't Miss

I’ve Stockpiled 3 Years of Food and More. Here Is My Story.

By News RoomJune 13, 2025

Courtesy Photo / Money Talks NewsAdvertising Disclosure: When you buy something by clicking links within…

6 Tips for How to Follow up on a Job Application (With Examples)

June 13, 2025

How a 12-Year-Old’s Side Hustle Makes Nearly $50,000 a Month

June 13, 2025

What’s the Highest Paid Hourly Position at Walmart?

June 13, 2025
About Us
About Us

Your number 1 source for the latest finance, making money, saving money and budgeting. follow us now to get the news that matters to you.

We're accepting new partnerships right now.

Email Us: [email protected]

Our Picks

Scammers Are Stealing Billions From Elders — And They’re Getting Better At It

June 14, 2025

Surveillance Nation: Who Else Has a File on Your Finances?

June 14, 2025

These Six-Figure Jobs Value Competence, Not Credentials

June 14, 2025
Most Popular

A Deep Dive on the County Level

September 7, 20231 Views

Scammers Are Stealing Billions From Elders — And They’re Getting Better At It

June 14, 20250 Views

Surveillance Nation: Who Else Has a File on Your Finances?

June 14, 20250 Views
Facebook Twitter Instagram Pinterest Dribbble
  • Privacy Policy
  • Terms of use
  • Press Release
  • Advertise
  • Contact
© 2025 Solutions For Real. All Rights Reserved.

Type above and press Enter to search. Press Esc to cancel.