BlackRock's CIO: The Federal Reserve should cut interest rates by 50 basis points in September instead of 25.

25 or 50? There is no agreement on the extent of the Fed's interest rate cut in September. Especially after the employment data in March last night was greatly revised, the uncertainty of the future interest rate trend increased.

Rick Rieder, chief investment officer of BlackRock's global fixed income, believes that the Fed needs to put pressure on interest rates at its September meeting to revive economic growth and ease the debt pressure on consumers.

"If it were me, I would cut interest rates by 50 basis points." He said in the Opening Bid podcast on Wednesday.

But Rieder believes that the Fed is more likely to cut interest rates by 25 basis points at a time until 2025.

He warned that the current economic situation is deteriorating: "Data such as overdue credit cards and automobile loans overdue are rising significantly, which reminds me of similar data performance during the financial crisis. We haven't reached that point yet, but we have begun to see this remarkable growth. "

The contradiction between the weak employment data and the overall economic performance makes the market's expectation of interest rate cuts in a state of vacillation, and investors have a strong wait-and-see mood.

On the one hand, the labor market shows a slowing model. Last night, the report of the U.S. Department of Labor showed that the number of non-agricultural employees in the U.S. dropped by 818,000 in one year. That is to say, the U.S. labor market is not as strong as expected, and the job market may take longer or last longer.

On the other hand, although the economy has obviously slowed down, it is still resilient. The ISM service index in July shows that business activities, new orders and employment have all improved. Retail sales increased by 1% in July, which also indicated that consumer spending increased.

Brian Cornell, CEO of Target, a retailer, also said that the recent performance has improved, and the store traffic has increased by 3%.

Jan Hatzius, chief economist of Goldman Sachs, predicts that the number of interest rate cuts will reach 75 basis points this year, and the last rate cut will be in December.

He said:

"The reduction of the risk of economic recession has strengthened our forecast that the Federal Reserve will only cut interest rates by 25 basis points at its September meeting."

Risk warning and exemption clause

The market is risky and investment needs to be cautious. This paper does not constitute personal investment advice, nor does it take into account the special investment objectives, financial situation or needs of individual users. Users should consider whether any opinions, viewpoints or conclusions in this article are in line with their specific situation. Invest accordingly at your own risk.