đąOdaily Planet Daily News, Oxford Economics CEO Adrian Cooper predicts that the Fed may start to cut interest rates in the second half of this year, but this will depend on changes in underlying inflation. đ
He pointed out that the rapid rise in labor inflation expectations surprised the Fed and many central banks. Laborers not only seek wage increases to make up for higher-than-expected inflation in the past, but also seek wage increases because they believe that inflation may remain high. đ
Cooper believes that the Fed wants to see decisive evidence that the process of slowing inflation will continue, not only overall inflation, but also core inflation will return to the level of 2%, before it is really ready to cut interest rates significantly. đ
He also said that although many people believe that tight monetary policy will lead to a significant slowdown in US economic growth, as interest rates rise, the United States introduced major fiscal stimulus measures last year, such as the Inflation Reduction Act and the CHIP Act, and fiscal stimulus measures largely offset the impact of US interest rate hikes. đ°
In addition, US consumers also continued to spend excess savings last year, and although this process may now be over, he believes that the US economy is still healthy and is unlikely to see a major adjustment in the US economy, and the United States seems to be achieving a soft landing. This allows the Fed to be cautious with monetary policy and take its time in making decisions on rate cuts. đ