According to BlockBeats, on September 16, former Federal Reserve economist and chief economist of New Century Advisors, Claudia Sahm, said in an interview last Friday: “Since the last Fed meeting, we have had two months of good inflation data, which is what the Fed wants.” However, the question now is how much action the Fed should take. As a compass for the direction of the central bank, the financial market has not provided any help in this regard. According to CME’s Fed Watch tool, the futures market focused on a 25 basis point rate cut for most of last week, but on Friday, traders turned to believe that a 25 or 50 basis point rate cut was equally likely.
Sam is among those who think the Fed should take bigger action. She said: “The inflation data alone is enough for us to cut interest rates by 25 basis points next week, and there will be a series of rate cuts after that.” She believes that the federal funds rate is already above 5% and has been fighting inflation for more than a year. She said: “The battle has been won, and they need to start cutting interest rates. The first cut should be 50 basis points to prevent a potential labor market recession.” Sam said: “The labor market has become weak since July last year, and Fed officials need to make a 50 basis point cut and be ready to take further action.” (Jinshi)
