From CNBC: 2024-09-12 20:39:08

Fitch predicts the U.S. Federal Reserve will cut rates by a total of 250 basis points in 10 moves across 25 months, starting in September. The Fed’s inflation rate is above its 2% target, and core inflation has dropped due to car prices. In August, U.S. inflation hit its lowest point since February 2021.

Meanwhile, Fitch expects China to keep slashing rates following a surprise cut by the People’s Bank in July. Deflationary pressures are growing, with falling prices across various sectors. China’s inflation rate is likely to be at 0.5% in 2024. On the other hand, Japan is bucking the trend, with the Bank of Japan raising rates more aggressively than expected in July.

The BOJ is confident in its “virtuous wage-price cycle” strategy, anticipating reaching a 1% policy rate by the end of 2026. Fitch believes a hawkish BOJ could have global implications.

Read more: Fed will ease slowly as there is ‘still work to do’ on inflation: Fitch