Oxford Economics CEO: Fed may start cutting interest rates in September

Odaily Odaily News: Adrian Cooper, CEO and Chief Economist of Oxford Economics "Our expectation is that the Fed will start cutting rates in the second half of this year, perhaps in September," he said. "But much will depend on what happens to underlying inflation, especially relative to wage growth. Labor inflation expectations have risen rapidly over the past few years, which has surprised the Fed and many central banks. This means that labor is not only seeking wage increases to make up for higher-than-expected inflation in the past, but also because they believe that inflation is likely to remain high. I think the Fed wants to see decisive evidence that the process of slowing inflation will continue, not only overall inflation, but also core inflation will return to 2% before it is really ready to cut interest rates significantly. Many people believe that tight monetary policy will lead to a significant slowdown in US economic growth, but as interest rates rise, the United States introduced major fiscal stimulus measures last year, such as the Inflation Reduction Act and the CHIP Act, which largely offset the impact of US interest rate hikes. In addition, US consumers continued to spend excess savings last year, and although this process may be over now, I think the US economy is still healthy and it is unlikely to see a major adjustment in the US economy, and the United States seems to be achieving a soft landing. This allows the Fed to be cautious with monetary policy and take its time to make decisions on interest rate cuts. The US labor market is still quite healthy, and business investment is also quite healthy, driven by various tax measures and new technologies." (Yicai)