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Jebaraj: NABE Sees Two More 25bps Rate Cuts This Year Just Like Powell

Fed Chair at NABE's Annual Meeting Says FOMC Not "In a Hurry to Cut Rates Quickly"

It’s not only country music stars who are rockin’ audiences in Nashville today. Federal Reserve Chair Jay Powell gave members of the National Association of Economics plenty to keep them on the edge of their seats at their Annual meeting today in Music City.

Mervyn Jebaraj is the chair of the NABE Outlook Panel which released it’s September 2024 survey today, covering everything from inflation and jobs, how aggressive Fed rate hikes will - or won’t be. And the biggest risks to the economy in an election year rife with geopolitical upheaval.

He was front and center at the event when Powell gave what markets considered a somewhat hawkish response to a question he was asked about when he expects at this point from the Fed’s November meeting.

“I think the way the markets have reacted to what he said as well is that, you that assuming nothing made major changes, which doesn't seem very likely, that we're looking at two quarter point cuts through the rest of this year,” he says. ”And that is exactly what the (Federal Open Market Commitee’s) summary of economic projections indicated,” he adds.

”And talking about our NABE survey as well, that is exactly what the panelists on our survey had indicated would be the outcome through the end of this year,” he says with a smile.

“So it doesn't seem likely at this point that we will get a 50 basis point cut at the November meeting. It is more likely to be 25 (basis points) in November, 25 December, Jebaraj says.

“And then you know, the pace of cuts in 2025 still remain to be seen. I think our base case is another hundred basis points based on our survey respondents,” he concludes.


Powell made remarks that also may have seemed a bit hawkish to some traders when he brought up the recent revisions to the National Income and Product Accounts which surprised him in a positive way. He explained that growth in Gross Domestic Income has been much weaker than growth in Gross Domestic Product, creating concerns that consumers may not be able to keep spending as much. Now GDI has been revised higher and is on par with GDP growth. What does this mean? What is Powell signalling?

Dive in now and find out what Jebaraj has to say about this. And hear more about what the NABE survey respondents have to say including some surprising divergences on what the Fed should have done with rates at its last meeting.

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Mervyn Jebaraj is the Director of Center for Business and Economic Research at University of Arkansas.

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Kathleen Hays Presents: Central Bank Central
Kathleen Hays Presents: Central Bank Central Podcast
Timely, in depth analysis of Federal Reserve policy and players, and of its central bank counterparts around the world that are driving global markets.