Capital Economics predicts Fed will cut interest rates in June

According to a report from King Ten, Paul Ashworth, chief North American economist at Capital Economics, said when commenting on the February PCE inflation data in the United States that the Federal Reserve is still expected to cut interest rates in June. The U.S. core PCE price index in February recorded an annual rate of 2.8%, in line with market expectations and higher than the Federal Reserve's 2% target. Ashworth noted that the "unexpected strength in real consumption" in the personal consumption expenditure data showed that "first-quarter GDP growth reached a healthy 2.4%" and that price rises were slowing. That gives the Fed time to keep rates on hold at its May 1 meeting and cut rates for the first time in June.