Standard Chartered expects half-point Fed rate cut next week

Standard Chartered expects the US Federal Reserve to cut interest rates by half a percentage point at its meeting next week, following weak August jobs data that showed unemployment rising to its highest level since 2021.

In a note cited by Bloomberg, the bank said, “We think the August labor-market data has opened the door to a ‘catch-up’ 50-basis point rate cut at the September FOMC meeting just as it did this time last year.”

The bank had previously forecast only a 25 basis point cut.

It added, “We recognize that we are moving early, but we expect preliminary revisions to employment data for April 2024 to March 2025 (due next week) to support our 50-bps call.”