From CNBC: 2024-09-02 05:20:50

British fund manager abrdn predicts a soft U.S. economy landing in 2025, but warns of a potential slowdown. Recent economic data like a revised report on job growth has raised concerns. The company’s head of Asian sovereign debt questions whether the Fed needs to consider easing policies to address economic weakness.

Preliminary annual benchmark revisions to nonfarm payroll numbers show job growth nearly 30% lower than initially reported. The Fed may need to ease policies by 150-200 basis points to address potential economic weakness, but changes take time to transmit through the economy. Market focus on rate cuts amid uncertainty remains a key issue.

Recent data on U.S. PCE price index suggests a smaller rate cut, with U.S. rate futures indicating a reduced chance of a 50 basis-point rate cut in September. Market expectations currently lean towards a 25-basis-point cut at the Fed’s upcoming meeting this month, with some still anticipating a larger 50 basis-point cut.

Read more: Abrdn analyst calls for faster rate cuts