The Fed is close to cutting rates – NAB

Tony Kelly, Senior Economist – International, Group Economics at National Australia Bank (NAB) believes that the US Federal Reserve (Fed) is preparing to cut the interest rates as soon as next month.

Key Quotes:

“Trade disputes continue to cast a shadow over the US economic outlook.

While recent data suggest some upside risk to our Q2 GDP forecast, business surveys point to a slowing economy.

The Fed is getting ready to cut rates; we expect two 25bp reductions in the federal funds rate, with July and September now the most likely dates.

There is considerable event risk around these projections – including the upcoming meeting between the US and Chinese Presidents.

Risks still appear slanted towards the Fed making more rather than fewer cuts."