Industry Experts Made an Urgent Call: “FED Should Cut Interest Rates by 75 Basis Points Immediately”

With global financial markets experiencing a sharp decline in the last two trading sessions, all eyes have turned to the Fed. Last week, the Fed decided to keep interest rates between 5.25% and 5.5%.

While industry watchers had predicted a 50 basis point cut at the September meeting, recent economic data and macroeconomic factors have led some experts to call for an immediate rate cut.

Jeremy Siegel, professor emeritus of finance at the Wharton School of Business at the University of Pennsylvania and chief economist at WisdomTree, called for an immediate 75 basis point cut in the federal funds rate, followed by another 75 basis point cut in September. The current federal rate should be between 3.5% and 4%, Siegel told CNBC.

“If they’re going to be as slow coming down as they were going up, which, by the way, was the first policy mistake in 50 years, then this is not a good time for the economy,” Siegel said.

Nigel Green of deVere Group also echoed the need for urgent action, advocating a 25 basis point cut to avoid a recession. “The Fed needs to act now or there are legitimate and far-reaching risks of a hard landing,” he said in a note.

Bitwise CIO Matt Hougan, on the other hand, suggested a more measured approach, saying an immediate rate cut is unlikely. “Powell is being very measured and the timing around the election makes an immediate cut unlikely,” Hougan said. “But we’re probably going to see a 50bps cut in September and over 100bps by the end of the year. We’re entering a new global liquidity cycle, as we did in the last cycle.”

Hougan said on March 12, 2020, the Dow fell 2,400 points and Bitcoin’in He recalled the market crash that saw its price fall by nearly 40%. He noted that this crash turned into a historic buying opportunity and that with the intervention of central banks, Bitcoin rose by more than 1,000% the following year.

*This is not investment advice.