In a statement, the investment bank said broad moderation in US inflation suggests the Fed is moving closer to implementing rate cuts.

“This is based on signals from the Fed Chair that a rate cut may occur as early as the next Federal Open Market Committee (FOMC) meeting in September 2024.

“However, if inflation remains stubbornly high, the Fed may delay reducing its interest rate,” it said.

MIDF further indicated that a policy easing is likely this year, as there appears to be a reduced need for the highly restrictive policy setting, with inflation approaching the Fed’s 2% target.

Meanwhile, Maybank Investment Bank Bhd (Maybank IB) has maintained its forecast for the Fed to cut rates by 50 basis points (bps) in 2024 and 100 bps in 2025.

“Attention will focus on job and inflation data and the Fed’s annual event before the FOMC meeting from September 17 to 18, 2024,” it said.

Maybank IB also highlighted that significant changes in the post-FOMC meeting statement were notable, especially concerning US job market conditions.

“These adjustments in FOMC statements follow recent data showing an uptick in the unemployment rate, a slowdown in nonfarm payroll growth, and a decrease in the inflation rate,” said Maybank IB.