The Federal Reserve is set to cut interest rates next week despite deep divisions among its officials on the direction of the US economy, according to leading academic economists.
The rate-setting Federal Open Market Committee meets on Tuesday, with the vast majority of investors expecting the US central bank to lower US borrowing costs by a quarter point for the third meeting in a row the following day.
Most of the economists polled by the Chicago Booth Clark Center on behalf of the Financial Times agree with the markets’ view, with 85 per cent of the 40 respondents agreeing that the Fed will ease borrowing costs in response to fears the US labour market is weakening.