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2025-07-29 13:59:51
[The Fed needs to meet three conditions to cut interest rates, and institutions predict that the first easing may come in December] 1. Vincent Reinhart, chief economist of BNY Mellon Investment Management, pointed out that the Fed needs to meet three key conditions simultaneously to start cutting interest rates: the job market shows signs of weakness, inflation is determined to return to the target path, and decision-makers have full confidence in the above judgments. The agency expects the Fed may cut interest rates by 25 basis points at the December meeting, but believes that the probability of implementing a rate cut between now and the end of the year is still less than 50%. 2. Reinhart emphasized that if future economic data continues to weaken, such interest rate cuts will be seen as policy calibrations, which is both a reassessment of the strength of economic expansion and a reflection that decision-makers may have underestimated the transmission effect of tariffs on inflation. This view highlights the complexity of decision-making faced by the Federal Reserve under the "data-dependent" policy framework.
