Investment Bank: Tariffs Could Prompt the Federal Reserve to Cut Interest Rates

Several investment bank analysts believe that it is only a matter of months before the Federal Reserve starts a new round of easing cycle. Danske Bank's US macro analyst Antti Ilvonen said that as the trade-weighted average tariff rate appears to be approaching 20.00%, rising costs will continue to put pressure on profit margins and household real purchasing power. This will dampen new hiring and put further pressure on consumption in the second half of the year, ultimately prompting the Fed to resume rate cuts at its September meeting. Fidelity International's senior global macro strategist Max Stainton also said that the impact of tariffs on economic growth may be greater than expected, and this risk is also increasing. Berenberg Bank US economist Atakan Bakiska said that after misjudging the 2021-2022 inflation surge and acting "too late" to raise interest rates in time, the Fed is now hesitant in the face of another supply shock (tariffs). (Golden Ten) [Odaily]