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michael feroli, chief u.s. economist at jpmorgan chase, said recently that the federal reserve should cut interest rates by 50 basis points at its september meeting.

"we believe that they should return to the neutral interest rate as soon as possible," feroli said in an interview with the media on thursday (september 5th) local time. he added that the highest point of the central bank's neutral interest rate is about 4%, which is 150 basis points lower than the current level, so "there is good reason to accelerate the pace of interest rate cuts."

cme's "fedwatch" tool shows that the market expects the bank to cut interest rates by 25 basis points or 50 basis points at its meeting in two weeks. at present, the two options are relatively close, with a probability of less than 60% for 50 basis points and a probability of slightly more than 40% for 25 basis points.

“if you wait until inflation gets back to 2% to take action, you may have waited too long,” feroli said. “while inflation is still a little above target, unemployment may be a little above what they consider full employment.”

in june, feroli's team's baseline forecast was for the first rate cut in november. in this regard, he recently explained: "at present, both employment and inflation are facing risks. if one of these risks begins to emerge, you should reverse the policy direction."

this friday, the u.s. department of labor will release the august employment situation report. in the july non-farm report, the u.s. unemployment rate rose to 4.3%, triggering the "sam rule" recession indicator.

even so, feroli doesn’t think the economy is “collapsing.” “if the economy was really collapsing, i think the federal open market committee (fomc) would have reason to cut rates by more than 50 basis points at the next meeting.”

it is worth mentioning that yesterday, the federal reserve's "hawkish" official, atlanta fed president bostic, also changed his mind - he is ready to start lowering interest rates. bostic also mentioned that he has shifted the focus to the central bank's "dual mission."