According to BlockBeats, on September 22, EY chief economist Gregory Daco said that the Federal Reserve was cutting interest rates "reactively" rather than proactively.
Daco noted that the rise in the unemployment rate to 4.3% after the July meeting raised concerns that the Fed was slow to act. He believes the Fed should adopt a forward-looking framework rather than relying on data.
Daco also noted that Wall Street is pricing in more future rate cuts than Fed policymakers, who estimate two more 25 basis point cuts by the end of 2024 and four more in 2025.
The Fed’s rate-setting committee was nearly evenly divided on the number of additional rate cuts this year, with seven policymakers backing another 25 basis point cut by the end of the year, nine members favoring a 50 basis point reduction and two policymakers predicting no more cuts.
