"The Fed's first interest rate cut in 2024 could take place in July"?

Steven Blitz, economist at GlobalData TS Lombard, said in a report published on June 19, there is a 60% chance that Fed Chairman Jerome Powell will surprise the market and lower interest rates next month.

According to CME FedWatch Tool, the market is currently only predicting a 10% interest rate cut at the July meeting. Most investors expect the first cut to take place in November. However, Blitz said the Fed's interest rate cuts will aim to prevent a recession from occurring as recent data shows the economy showing signs of weakness.

Furthermore, as Chairman Powell reiterated his stance that the Fed will depend on data to make interest rate decisions, an early cut is not out of the question.

“Recent economic data suggests that if June nonfarm payrolls are similar to April and the overall June numbers are similar, the FOMC will take a more dovish stance in its announcement,” Blitz said. July."

With recent economic data showing cracks forming in the housing and labor markets, interest rate cuts could come sooner than most markets expect. “The Fed will most likely ease in July,” Blitz said. “A recession is inevitable.”