FOMC meeting, September 17-18, 2024: Fed is expected to cut its policy rate by 0.25% and signal two more rate cuts during the remainder of 2024 (Business Brief No.4082 Full Ed.)

• At the upcoming FOMC meeting on September 17-18, 2024, it is anticipated that the Fed will cut the policy interest rate by 0.25 percent to a range of 5.00-5.25 percent. This follows signals from Fed Chair Jerome Powell during the Jackson Hole Economic Symposium that it is time to reduce rates, as inflation trends towards the Fed’s target of 2.0 percent, and the US labor market shows signs of weakening.
• KResearch is of the view that the Fed may signal further interest rate cuts through the Dot Plot, with two additional reductions of 0.25 percent each at the remaining meetings in November and December 2024. As a result, the Fed Funds rate is expected to decline to 4.50-4.75 percent by the end of 2024 although markets largely expect the Fed to make a more aggressive cut of 0.50 percent each either November or December meeting.
• Meanwhile, the US dollar has weakened sharply over the past 1-2 months as markets anticipate the Fed’s interest rate cuts. Looking ahead, both the US dollar and Thai Baht are expected to remain volatile in line with economic figures, including inflation.