Fed interest rates

The Bank of Japan has raised interest rates to 0.25%, marking a significant shift after four decades of deflation, while the US Federal Reserve is under pressure to cut rates due to economic slowdown concerns. Recent data, including a disappointing July jobs report, has led markets to anticipate multiple rate cuts from the Fed this year, potentially totaling nearly 2% over the next 12 months. Chicago Fed President Austan Goolsbee indicated that current monetary policy is too tight for the existing economic conditions, hinting at an impending rate cut. Fed Chairman Jerome Powell's recent speech has further fueled speculation about imminent rate cuts, with expectations of a 0.25% reduction in the federal funds rate next month. Former Cleveland Fed President Loretta Mester supports a gradual approach to rate cuts, advocating for a series of 25 basis point reductions as inflation stabilizes closer to the Fed's target of 2%. Overall, the global economic landscape remains volatile, with central banks carefully navigating between supporting growth and controlling inflation.