Standard Chartered: Fed Has No Compelling Reason to Launch Large Interest Rate Cuts

Steve Englander, global head of G10 FX research and North American macro strategy at Standard Chartered in New York, said recent US economic data did not provide a compelling case for a 50 basis point rate cut at the upcoming FOMC meeting. A 50 basis point cut but a bad decision could be worse than a 25 basis point cut but a bad decision. The reason for the 25 basis point cut is that the forthcoming inflation data does not support a rapid approach to the 2% inflation target. At the same time, the recent rise in unemployment also shows a worrying deterioration in the economy.