Fed Expected to Cut Rates Despite High CPI ✅
Pepperstone analyst Michael Brown believes that despite the U.S. September #CPI data coming in slightly higher than expected, it is unlikely to significantly alter the Federal Reserve’s policy outlook. He points out that while the employment report was strong, #inflation pressures are continuously easing, leading to an expectation that the Fed will cut rates by 25 basis points at each of the remaining meetings in 2023.
This rate-cutting pace may continue through 2025, with the federal funds rate likely to fall to around 3% by the summer of 2024. He describes this as a “Fed put option,” providing greater #confidence for market participants and limiting stock market pullbacks, which are often seen as buying opportunities.
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