TISCO Reveals Fed’s Interest Rate Cut: What to Expect

The TISCO Economic and Strategic Analysis Center (TISCO ESU) indicates that the US Federal Reserve (Fed) has cut interest rates by 0.5%, more than expected. This move is expected to have a significant impact on the economy, with further reductions predicted for this year and 2025.

Fed’s Interest Rate Cut: A Closer Look

Mr. Khomson Prakobphon, head of the TISCO Economic and Strategic Analysis Center (TISCO ESU), revealed that the US Federal Reserve (Fed) has decided to reduce the policy interest rate by 0.5% (-50bps) to a level of 4.75-5.00%. This move is seen as a positive step towards achieving the 2% inflation target on a sustainable basis.

Fed Chairman Jerome Powell’s Statement

Fed Chairman Jerome Powell said in a statement after the meeting that he would continue to adhere to the principle of data reliance. Mr. Powell further stated that the Fed has not adjusted policy interest rates too slowly and that the Fed itself intends to commit to not adjusting interest rates too slowly.

TISCO’s Analysis and Predictions

The TISCO Center for Economic Analysis and Strategy believes that the policy interest rate cut of 0.5% is a reduction at a higher rate than usual. This move is mainly to support the labor market from weakening further (Preemptive Cut). The center also predicts that the Fed will cut interest rates by 0.5% in the next period, split into November and December, and by approximately 1-1.25% in 2025.

What to Expect in the Coming Months

For the next period, the TISCO Center for Economic and Strategic Analysis sees the Fed coming back and cutting interest rates by 0.5%, split into November and December. In 2025, the center expects the Fed to reduce interest rates by approximately 1-1.25% (100-125bps), with the possibility of cutting interest rates 1-2 times in the first quarter and once a quarter after that.