{"id":29796,"date":"2023-06-30T16:45:47","date_gmt":"2023-06-30T20:45:47","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/this-economist-says-he-wont-rule-out-a-fed-interest-rate-cut-by-year-end-heres-why\/"},"modified":"2023-06-30T16:45:48","modified_gmt":"2023-06-30T20:45:48","slug":"this-economist-says-he-wont-rule-out-a-fed-interest-rate-cut-by-year-end-heres-why","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=29796","title":{"rendered":"This economist says he won\u2019t rule out a Fed interest rate cut by year-end. Here\u2019s why"},"content":{"rendered":"
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Wharton professor Jeremy Siegel said on Friday that he is not ruling out an interest rate cut by the Federal Reserve by the end of the year, despite market expectations.\u00a0<\/p>\n

Fed fund futures traders are pricing in a scant 1% chance that the central bank will lower its key interest rate from the current range of 5% to 5.25%, according to CME FedWatch.\u00a0\u00a0\u00a0<\/p>\n

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The U.S. central bankers penciled in two more rate hikes this year in its \u201cdot plot\u201d forecast at their last meeting in June. <\/p>\n

\u201cComing into a political year, and it seems that we are already in a political year, if we get some soft data, if we get some worrisome employment data, if we get a negative jobs report, you are gonna have political pressure,\u201d Siegel said in an interview with CNBC<\/a> on Friday.\u00a0<\/p>\n

Siegel also said he thinks the true inflation numbers have already fallen down to the 2% target year-over-year, if calculated with the real rental and shelter prices. While the core PCE index, which is Fed\u2019s favorite inflation gauge, still stood at around 4.6% in May, the Fed \u201calso knows that lower data is going to come in the second half of the year,\u201d according to Siegel.\u00a0<\/p>\n

While Siegel said there are still more risks on the downside than on the upside in the second half of the year, the stock market\u2019s upward momentum could continue. \u201cI don\u2019t see the short-run trend breaking at any point soon,\u201d Siegel said.\u00a0<\/p>\n

U.S. stocks rallied to close the first half of this year, with the Dow Jones Industrial Average
\n DJIA,
\n +0.84%<\/bg-quote>
\n up 3.8%. The S&P 500
\n SPX,
\n +1.23%<\/bg-quote>
\n jumped 15.9% and the Nasdaq Composite
\n COMP,
\n +1.45%<\/bg-quote>
\n gained 31.7%, according to FactSet data.<\/p>\n<\/p><\/div>\n<\/div>\n