{"id":76341,"date":"2024-09-17T12:00:10","date_gmt":"2024-09-17T12:00:10","guid":{"rendered":"http:\/\/guid_108035060"},"modified":"2024-09-17T12:00:10","modified_gmt":"2024-09-17T12:00:10","slug":"fed-to-cut-rates-by-a-quarter-point-with-a-soft-landing-expected-according-to-cnbc-fed-survey","status":"publish","type":"post","link":"https:\/\/wp.timesamerica.net\/fed-to-cut-rates-by-a-quarter-point-with-a-soft-landing-expected-according-to-cnbc-fed-survey\/","title":{"rendered":"Fed to cut rates by a quarter point with a soft landing expected, according to CNBC Fed Survey"},"content":{"rendered":"\n<div><img decoding=\"async\" src=\"https:\/\/wp.timesamerica.net\/wp-content\/uploads\/2024\/09\/fed-to-cut-rates-by-a-quarter-point-with-a-soft-landing-expected-according-to-cnbc-fed-survey.jpg\" class=\"ff-og-image-inserted\"><\/div>\n<p><span class=\"HighlightShare-hidden\" style=\"top:0;left:0\"><\/span><\/p>\n<div class=\"InlineImage-imageEmbed\" id=\"ArticleBody-InlineImage-108024800\" data-test=\"InlineImage\">\n<div class=\"InlineImage-wrapper\">\n<div class=\"InlineImage-imagePlaceholder\" style=\"padding-bottom:55.55555555555556%\">\n<div style=\"height:100%\" class=\"lazyload-placeholder\"><\/div>\n<\/div>\n<div>\n<div class=\"InlineImage-imageEmbedCaption\">Federal Reserve Chairman Jerome Powell.<\/div>\n<div class=\"InlineImage-imageEmbedCredit\">Andrew Harnik | Getty Images<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"group\">\n<p>With considerable uncertainty about what the Federal Reserve will do at its meeting this week, respondents to the CNBC Fed Survey are forecasting a more gradual approach to rate cuts than is currently priced into markets.<\/p>\n<p>The survey shows 84% of the 27 respondents, including economists, fund managers and strategists, see the Fed cutting by a quarter percentage point, with 16% seeing a half-point decrease. That compares with 65% probability of a half point cut now priced into <span class=\"waslinkname\">fed futures markets<\/span>.<\/p>\n<div style=\"height:100%\" class=\"lazyload-placeholder\"><\/div>\n<p>The differences grow over time with survey respondents forecasting a year-end funds rate of 4.6% and 3.7% by the end of 2025, compared to 4.1% and 2.8% in the futures market.<\/p>\n<\/div>\n<div class=\"InlineImage-imageEmbed InlineImage-inlineInfographic\" id=\"ArticleBody-InlineImage-108035063\" data-test=\"InlineImage\">\n<div class=\"InlineImage-wrapper\">\n<div class=\"InlineImage-imagePlaceholder\" style=\"padding-bottom:75.18796992481202%\">\n<div><button class=\"InlineImage-closeEnlargedImage\"><svg width=\"20\" height=\"20\" viewBox=\"0 0 20 20\" fill=\"#002F6C\" aria-labelledby=\"title desc\" role=\"img\" focusable=\"false\" data-analytic-id=\"expand-icon\" class=\"InlineImage-background\"><title>Zoom In Icon<\/title><desc>Arrows pointing outwards<\/desc><circle cx=\"10\" cy=\"10\" r=\"10\" fill=\"white\" stroke=\"#002F6C\" \/><path d=\"M9.20185 10.7982C8.96049 10.5568 8.57037 10.5568 8.32901 10.7982L5.67901 13.4482V11.2346C5.67901 10.8938 5.40308 10.6173 5.06173 10.6173C4.72037 10.6173 4.44444 10.8938 4.44444 11.2346V14.9383C4.44444 15.279 4.72037 15.5556 5.06173 15.5556H8.76543C9.10679 15.5556 9.38271 15.279 9.38271 14.9383C9.38271 14.5975 9.10679 14.321 8.76543 14.321H6.55185L9.20185 11.671C9.44321 11.4296 9.44321 11.0395 9.20185 10.7982ZM14.9383 4.44446H11.2346C10.8932 4.44446 10.6173 4.721 10.6173 5.06174C10.6173 5.40248 10.8932 5.67903 11.2346 5.67903H13.4481L10.7981 8.32903C10.5568 8.57038 10.5568 8.96051 10.7981 9.20187C10.9185 9.32224 11.0765 9.38273 11.2346 9.38273C11.3926 9.38273 11.5506 9.32224 11.671 9.20187L14.321 6.55187V8.76545C14.321 9.10619 14.5969 9.38273 14.9383 9.38273C15.2796 9.38273 15.5556 9.10619 15.5556 8.76545V5.06174C15.5556 4.721 15.2796 4.44446 14.9383 4.44446Z\" \/><\/svg><\/button><\/div>\n<div style=\"height:100%\" class=\"lazyload-placeholder\"><\/div>\n<\/div>\n<div>\n<div class=\"InlineImage-imageEmbedCaption\"><\/div>\n<div class=\"InlineImage-imageEmbedCredit\">CNBC Fed Survey<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"group\">\n<p>&#8220;We believe that the equivalent of eight cuts in six meetings is more than what will happen,&#8221; John Donaldson, director of fixed income, Haverford Trust Co. wrote in response to the survey. &#8220;That forecast is more in line with a hard landing than a soft landing.&#8221;<\/p>\n<p>Barry Knapp from Ironsides Macroeconomics says, &#8220;We suspect the FOMC will either under-promise or under-deliver, perhaps both.&#8221;<\/p>\n<p>The survey stands on one side of a debate that has divided markets in the past several days over whether the Fed cuts 25 or 50 basis points, creating an unusual amount of uncertainty for a Fed that has telegraphed its moved at almost every meeting. (1 basis point equals 0.01%)<\/p>\n<\/div>\n<h2 class=\"ArticleBody-subtitle\">Soft landing expected<\/h2>\n<div class=\"group\">\n<p>The major difference could be that survey respondents appear less worried about the economy overall than futures markets and more convinced the Fed has time to enact gradual rate cuts. Seventy-four percent said the September rate cut comes in time to preserve a soft landing, with just 15% saying it&#8217;s too late.<\/p>\n<div style=\"height:100%\" class=\"lazyload-placeholder\"><\/div>\n<\/div>\n<div class=\"InlineImage-imageEmbed InlineImage-inlineInfographic\" id=\"ArticleBody-InlineImage-108035064\" data-test=\"InlineImage\">\n<div class=\"InlineImage-wrapper\">\n<div class=\"InlineImage-imagePlaceholder\" style=\"padding-bottom:75.18796992481202%\">\n<div><button class=\"InlineImage-closeEnlargedImage\"><svg width=\"20\" height=\"20\" viewBox=\"0 0 20 20\" fill=\"#002F6C\" aria-labelledby=\"title desc\" role=\"img\" focusable=\"false\" data-analytic-id=\"expand-icon\" class=\"InlineImage-background\"><title>Zoom In Icon<\/title><desc>Arrows pointing outwards<\/desc><circle cx=\"10\" cy=\"10\" r=\"10\" fill=\"white\" stroke=\"#002F6C\" \/><path d=\"M9.20185 10.7982C8.96049 10.5568 8.57037 10.5568 8.32901 10.7982L5.67901 13.4482V11.2346C5.67901 10.8938 5.40308 10.6173 5.06173 10.6173C4.72037 10.6173 4.44444 10.8938 4.44444 11.2346V14.9383C4.44444 15.279 4.72037 15.5556 5.06173 15.5556H8.76543C9.10679 15.5556 9.38271 15.279 9.38271 14.9383C9.38271 14.5975 9.10679 14.321 8.76543 14.321H6.55185L9.20185 11.671C9.44321 11.4296 9.44321 11.0395 9.20185 10.7982ZM14.9383 4.44446H11.2346C10.8932 4.44446 10.6173 4.721 10.6173 5.06174C10.6173 5.40248 10.8932 5.67903 11.2346 5.67903H13.4481L10.7981 8.32903C10.5568 8.57038 10.5568 8.96051 10.7981 9.20187C10.9185 9.32224 11.0765 9.38273 11.2346 9.38273C11.3926 9.38273 11.5506 9.32224 11.671 9.20187L14.321 6.55187V8.76545C14.321 9.10619 14.5969 9.38273 14.9383 9.38273C15.2796 9.38273 15.5556 9.10619 15.5556 8.76545V5.06174C15.5556 4.721 15.2796 4.44446 14.9383 4.44446Z\" \/><\/svg><\/button><\/div>\n<div style=\"height:100%\" class=\"lazyload-placeholder\"><\/div>\n<\/div>\n<div>\n<div class=\"InlineImage-imageEmbedCaption\"><\/div>\n<div class=\"InlineImage-imageEmbedCredit\">CNBC Fed Survey<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"group\">\n<p>Overall, the probability of a soft landing stands at 53%, about where it&#8217;s been since March, while the chance of a recession has ticked up to 36%, five points above its recent low in June but well below the 50% level that prevailed for much of 2022 and 2023. The outlook for growth remained at 2% for this year and ticked down to 1.7% for 2025, two tenths below the July survey, but still at or around potential and not a recession.<\/p>\n<p>&#8220;The economy is growing faster than expected in 2024, and the Fed has time to lower rates at a measured pace,&#8221; said Michael Englund of Action Economics.<\/p>\n<p>&#8220;While there are economic risks on the horizon, the coming Fed cuts will be much closer to a &#8216;mid-cycle correction&#8217; trend, a la 1995, 1997, and 2019, than to an end of cycle recessionary trend,&#8221; wrote Guy LeBas chief fixed income strategist, Janney Montgomery Scott.<\/p>\n<p>Forecasts for the unemployment rate did tick modestly higher. Compared to the current rate of 4.2%, unemployment is seen at 4.4% and 4.5% for this year and next, both about two-tenths higher than the prior survey.<\/p>\n<\/div>\n<h2 class=\"ArticleBody-subtitle\">Too late?<\/h2>\n<div class=\"group\">\n<p>Not everyone believes the Fed has time. &#8220;Powell&#8217;s legacy is dependent on him nailing a soft landing after waiting too late to raise rate in 2021,&#8221; said Diane Swonk, chief economist at KPMG U.S. &#8220;The window on that occurring is narrowing.&#8221; And Neil Dutta of Renaissance Macro Research rejects the criticism that a half-point cut would spook markets, saying there are real risks if the Fed only goes a quarter point.<\/p>\n<p>Equity valuations are believed to be roughly in line for a soft landing with 50% saying they are overpriced and 47% saying they are underpriced. But 97% say they are significantly or somewhat overpriced for a recessionary outcome.<\/p>\n<p>The S&amp;P has seen the gains for the year, according to the average forecast, with the the index falling to 5546 by year end, a little more than 1% below the current level. The average forecast puts the S&amp;P at 5806 by the end of next year, or just a 3% gain from here.<\/p>\n<\/div>\n<div id=\"ArticleBody-MobileAdhesion\" class=\"MobileAdhesion-container\" data-module=\"mps-slot\"><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Federal Reserve Chairman Jerome Powell. Andrew Harnik | Getty Images With considerable uncertainty about what the Federal Reserve will do at its meeting this week, respondents to the CNBC Fed Survey are forecasting a more gradual approach to rate cuts than is currently priced into markets. The survey shows 84% of the 27 respondents, including &hellip;<\/p>\n","protected":false},"author":1,"featured_media":76342,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-76341","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bussiness","has-thumb","has-featured"],"_links":{"self":[{"href":"https:\/\/wp.timesamerica.net\/wp-json\/wp\/v2\/posts\/76341"}],"collection":[{"href":"https:\/\/wp.timesamerica.net\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/wp.timesamerica.net\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/wp.timesamerica.net\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/wp.timesamerica.net\/wp-json\/wp\/v2\/comments?post=76341"}],"version-history":[{"count":0,"href":"https:\/\/wp.timesamerica.net\/wp-json\/wp\/v2\/posts\/76341\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/wp.timesamerica.net\/wp-json\/wp\/v2\/media\/76342"}],"wp:attachment":[{"href":"https:\/\/wp.timesamerica.net\/wp-json\/wp\/v2\/media?parent=76341"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/wp.timesamerica.net\/wp-json\/wp\/v2\/categories?post=76341"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/wp.timesamerica.net\/wp-json\/wp\/v2\/tags?post=76341"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}