BlackRock: "Fed may cut rates by 0.5%p in September"

JH Kim

Summary

Rick Rieder, Chief Investment Officer at BlackRock, stated that the Fed could lower the benchmark interest rate by 0.5 percentage points in September.
With U.S. inflationary pressure turning out to be weaker than expected, it was indicated that the Fed could take a 'big step.'
The July Consumer Price Index (CPI) results suggest that President Donald Trump's tariff policies are not significantly impacting prices for now.

According to CNBC on the 12th (local time), Rick Rieder, Chief Investment Officer (CIO) at the world's largest asset management firm BlackRock, projected that the U.S. Federal Reserve (Fed) could lower its benchmark interest rate by as much as 0.5 percentage points in September.

In an analyst note sent to clients that day, CIO Rieder stated, "Inflationary pressures in the U.S. have proven to be weaker than expected," adding, "It would be reasonable for the Fed to take a 'big step' by lowering rates by 0.5 percentage points instead of the customary 0.25 percentage points at the September meeting."

Previously, the Bureau of Labor Statistics (BLS) under the U.S. Department of Labor released the Consumer Price Index (CPI) for July. The core CPI rose 3.1% year-on-year, slightly above the market forecast of 3.0%, but the overall CPI rose by 2.7%, below the projected 2.8%. This suggests that President Donald Trump's tariff policies are not currently putting significant pressure on prices.