Nearly 40% of economists polled by the Wall Street Journal believe that the Federal Reserve Bank will cut rates next month, according to MarketWatch.
While some economists such as Joe Davis of Vanguard have speculated that an “insurance” rate cut by the Fed is soon approaching, others such as Kathy Bostjancic at Oxford Economics believe that the American economy is not yet weak enough to justify cutting rates.
The May employment report from the Labor Department saw only 75,000 jobs created that month, far below the expected 185,000. However, data on retail sales activity and consumer sentiment, while slightly below expectations, may not be enough to suggest a pre-emptive rate cut.
The Fed may also be considering lowering already low rates in the face of the Sino-American trade conflict, which may worsen in the future. Investors are expecting that the trade war between the United States and China will prompt a more dovish or accommodating posture from the Fed. The Fed is expected to make this decision and others by 2 pm EST on Wednesday, June 19th.