Analysts urge Fed to cut interest rates sooner to prevent economic weaknesses, potential positive impact.

From Investing.com: 2024-06-18 08:29:03

Analysts at Allianz are urging the Federal Reserve to cut interest rates sooner rather than later, emphasizing the crucial timing of the first rate cut in determining the overall impact on the economy. Market volatility is being fueled by uncertainty over when the rate-cutting cycle will begin, with potential repercussions on economic outcomes and stability.

The timing of the rate cuts is seen as key to mitigating economic weaknesses and preventing a recession. Historical examples highlight the positive impact of timely rate cuts, while delays could force the Fed into more aggressive rate cuts later on to address escalating economic and financial vulnerabilities.

Analysts caution that a delayed start to rate cuts could result in unnecessary harm to the economy’s growth prospects and financial stability, particularly affecting vulnerable segments. Waiting too long to initiate rate reductions may force the Fed to react to crises rather than guiding the economy towards a desired soft landing.



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