Analysts Divided on Fed Rate Cut Size Next Week

PANews, September 15 - According to Jin10, analysts are divided on the size of the Fed's rate cut next week. Walter Todd, Chief Investment Officer of Greenwood Capital, believes the Fed should cut rates by 50 basis points on Wednesday. He argues that the gap between the 2-year Treasury yield (hovering around 3.6%) and the federal funds rate (5.25%-5.5%) is "a signal that the Fed is starting its rate-cutting cycle late and needs to catch up." JPMorgan Chase has also reiterated its call for a 50 basis point cut next week "to accommodate the shift in the risk balance."

However, Goldman Sachs remains convinced that the Fed will ease by 25 basis points next week and at each of the remaining meetings this year. The camp advocating for a smaller cut is concerned that a 50 basis point reduction could risk reigniting inflation and signal a poor economic outlook, potentially triggering panic on Wall Street.