Former NY Fed President Dudley: 25 or 50 bps rate cut likely in September

Dudley, former president of the U.S. New York Fed, said a fortnight ago, he himself from hawkish to dovish, giving up on the Fed's support for further interest rate hikes, and instead advocated an immediate interest rate cut to avoid a recession. In the last two weeks, there is more evidence that the U.S. labour market tends to weaken, while inflation is further moderating, after which the longer the Fed waits, the greater the likelihood of potential damage caused. Fed members' estimates of the neutral rate range between 2.4 per cent and 3.8 per cent, meaning the current effective federal funds rate of 5.3 per cent is a long way from neutral. Once a recession becomes a reality, the Fed will need to cut rates to 3% or lower. It is expected that at its September meeting, the Fed could cut rates by 25 or 50 basis points.