Bank of America: Fed expected to cut rates by 25 bps at September meeting

According to Golden Finance, Bank of America believes that after the ISM manufacturing report and other data showed weakness, the weaker-than-expected non-farm payroll report in July helped secure a Federal Reserve rate cut in September. Therefore, we have adjusted our outlook on monetary policy towards further interest rate cuts. We now expect the Fed to cut rates by 25 basis points at its meeting in September. Despite this, we still expect the Fed to gradually ease monetary policy. While making this forecast adjustment, we also lowered our expectations for the final interest rate of the upcoming normalization cycle, reducing it by 25 basis points to 3.25-3.5%. If the economy cools faster than we or the Fed anticipate, it means there is less demand for a long-term high-interest-rate policy stance.