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cailianshe news, september 3 (editor: zhao hao)although british investment firm aberdeen asset management expects the us economy to achieve a "soft landing", its head of asian sovereign debt, kenneth akintewe, believes the country still faces the risk of a long-term economic slowdown in 2025.

in an interview with the media on monday (september 2nd) local time, akintewe said, "is it possible that the federal reserve has sleepwalked towards policy mistakes?" he pointed out that some data have already reflected the weaker economic conditions, including the previously significantly revised non-farm data.

two weeks ago, the u.s. bureau of labor statistics released a report that lowered its previous estimate of new jobs by 818,000 in the statistical period from april 2023 to march 2024. this means that the average monthly net new jobs in these 12 months have dropped from about 242,000 to about 174,000.

the nearly 30% downward revision was the largest adjustment since 2009 and caused some confusion in financial markets. akintewe asked: "is it possible that the economy is weaker than the overall data shows, and should the fed have already started cutting interest rates?"

he explained that it takes time for the fed's policy changes to be transmitted to actual economic activities, whether it is a cumulative rate cut of 150 basis points or 200 basis points, "it will still take six to eight months for these easing policies to be transmitted to the market."

at the end of july, the federal open market committee (fomc) of the federal reserve "did not take action" despite the huge pressure from the outside world to cut interest rates. after the unemployment rate triggered the "sam rule", wall street investment banks, economists, and members of congress accused the bank of missing the best time to cut interest rates.

akintewe pointed out that if the u.s. economy suddenly shows more signs of weakness in early 2025 and the fed cuts interest rates again, it will take until the second half of 2025 to see the effect of the loose policy being transmitted to the economy. by then, the economic situation may be "very different."

akintewe also pointed out a lesser-known question: “why is the policy rate still at 5.5% when inflation has almost dropped to 2.5%? in this uncertain environment, is this 300 basis points real interest rate really needed?”

the annual rate of the us personal consumption expenditure (pce) price index for july released last friday remained at 2.5%, and the annual rate of the core pce price index, which is the most favored by the federal reserve, also remained at 2.6%. at present, the market expects that the september meeting is more likely to cut interest rates by 25 basis points rather than 50 basis points.

cailianshe mentioned that the actual extent of the rate cut will still depend on the performance of economic data in the next two weeks. the most important of these are the us july jolts job vacancies on wednesday, the us august non-farm payrolls on friday, and the us august cpi data next wednesday.

jpmorgan chasephil camporeale, portfolio manager at asset management firm global allocation strategy, believes that the non-farm payrolls report released on friday may be the final "arbiter" of whether the federal reserve will cut the benchmark interest rate by 25 basis points or 50 basis points at its september policy meeting.