The four largest U.S. banks now believe the Federal Reserve will cut interest rates amid growing recession fears. Bank of America economists said the Fed’s September rate cut was a “real lock-in” after last week’s $6.4 trillion global stock market crash, the Business Times reported.
Wells Fargo analysts expect the Fed to cut rates by 50 bps in September and another 50 bps in November, citing worsening labor market conditions, saying, “The FOMC (Federal Open Market Committee) needs to return to a ‘neutral’ policy stance soon or risk a vicious cycle of labor market weakness.” Fargo’s analysis reads. JPMorgan Chase also reportedly believes two 50 bps cuts will be in the pipeline in the next two months.
