Fed Is Headed for Two Quarter-Point Rate Cuts This Year: Survey

• Economists now expect the Fed to cut interest rates multiple times this year -- coming round to the view held by investors, though they haven’t gotten all the way there yet.
• Respondents to a June 20-24 survey said they expected Fed officials will cut rates by a quarter-percentage point in September, and again in December.
• Before last week’s meeting of the Federal Open Markets Committee, a similar survey found the economists expecting just one quarter-point cut.
• Economists remain more cautious in their assessments of what the Fed will do than investors, who are betting that the easing cycle will start in July and amount to about three-quarters of a percentage point by year-end.
• Based on median responses, the economists saw a 50% probability of the U.S. and China agreeing at this week’s G-20 meeting in Osaka to resume trade talks. The odds of a more positive or more negative outcome were almost evenly split.

 (Source: Bloomberg)