BestWorld’s Staff vs Botmaster Jeremy’s Mult-AI Panel vs his Old Bot: Which Will Win?
Summary of all our current Sept. FED rate cut forecasts:
Today’s Multi-AI Panel answer is 45% likely, down from 68%’ on Aug. 13. Also today, Jeremy added Perplexity to this panel. Today’s Old Bot answer is 35%, holding steady from Aug. 13. We humans are holding steady at 80%
[Old Bot] Rationale: The consensus among various AI assessments is that the Federal Reserve’s decision to cut interest rates in September 2024 will hinge primarily on inflation trends, economic growth, and labor market conditions. Although current economic indicators suggest maintaining or increasing rates to combat inflation that remains above the 2% target, weakening job markets and potential external global events could shift this stance. Some predictions highlight a 64% likelihood of a rate cut due to rising unemployment and inflation nearing the Fed’s target, while others see a reduction as moderately unlikely unless there are clear signs of economic slowdown or significant decrease in inflation. Factors such as the outcomes of earlier rate cuts in 2024 and the 2024 US presidential election may also play a role in this decision.
Old bot = 35%
BestWorld staff’s latest forecast details:
Their forecasts are 80%, unchanged since Aug. 9. Their full forecast history is below:
Welcome to the Multi-AI Panel Discussion, Round 1
[Moderator]: What is the probability that the US FED will cut interest rates in September 2024?
[Perplexity]: Thank you for the opportunity to participate in this panel discussion. As a helpful assistant, I will provide my analysis based on the available data up to August 14, 2024.
The probability of the US Federal Reserve (FED) cutting interest rates in September 2024 depends on various economic indicators and market conditions. As of my last update, the economic landscape has been influenced by factors such as inflation rates, employment data, and global economic trends. The FED’s decision to adjust interest rates is typically guided by its dual mandate to promote maximum employment and price stability.
Given the dynamic nature of economic data and the potential for unforeseen events, predicting the FED’s actions with certainty is challenging. However, if recent trends indicate a slowdown in economic growth or a significant reduction in inflationary pressures, the FED might consider lowering interest rates to stimulate economic activity. Conversely, if inflation remains a concern or the economy shows robust growth, the FED might maintain or even increase interest rates to manage inflation and prevent the economy from overheating.
In conclusion, without access to real-time data or specific economic indicators as of August 2024, it is difficult to provide a precise probability. However, the FED’s decision will likely be influenced by the most current economic data and forecasts available at the time of their meeting in September 2024.
[Claude]: Thank you, Moderator. As of August 2024, the probability of the Federal Reserve cutting interest rates in September 2024 appears to be relatively low, but not entirely off the table. The Fed’s decisions are heavily data-dependent, and we need to consider several factors that could influence their decision.
Firstly, we should look at the current state of inflation and employment. If inflation has continued to trend downward and is approaching the Fed’s 2% target, this could support a rate cut. However, if the labor market remains tight with low unemployment rates, the Fed might be hesitant to cut rates too soon.
Another crucial factor is the overall economic growth. If we’re seeing signs of economic slowdown or recession, the Fed might be more inclined to cut rates to stimulate growth. However, if the economy is showing resilience and steady growth, the Fed may prefer to hold rates steady. It’s also worth noting that September 2024 is just ahead of the U.S. presidential election, which could potentially influence the Fed’s decision-making process, although they strive to remain apolitical.
[Cohere]: The probability of the US Federal Reserve cutting interest rates in September 2024 appears to be high and is expected by many investors and economists.
The Federal Reserve has been battling inflation for over two years, and while it has signalled that it wants more positive data before cutting rates, there are signs that the US economy is cooling. Inflation has been falling, with the consumer price index reaching 3% in June 2024, the lowest in over three years.
Additionally, the job market is showing signs of weakening, with the unemployment rate rising to 4.3% from a historic low of 3.5% a year ago, and the share of Americans in the labour force who are jobless increasing to 4.3% in July 2024, the highest since October 2021.
As a result, there is a growing expectation that the Federal Reserve will cut interest rates at its next meeting in September, with some predicting a large reduction of half a percentage point or more. However, it is worth noting that the Federal Reserve has stated that its decision will be driven by data and not politics, and it remains to be seen whether the economic data will support the case for a rate cut in September.
[OpenAI]: Given the current economic landscape and recent indicators, the probability that the US Federal Reserve (FED) will cut interest rates in September 2024 appears to be moderate but not certain. Economic data, such as inflation rates, employment statistics, and GDP growth, will be critical determinants. As of August 2024, inflation has been running slightly above the FED’s 2% target, but it has shown signs of stabilization. The employment market remains strong, though there are indications of cooling off, which typically warrants a cautious approach from the FED.
Furthermore, the global economic environment, including geopolitical tensions and performance of major economies, could influence the FED’s decision. If global growth shows signs of slowing, the FED might lean towards a rate cut to maintain economic stability. However, on the domestic front, if the GDP growth continues to meet or exceed expectations, the FED might decide to keep rates steady.
In summary, while there are factors supporting a potential rate cut, the current stability of core economic indicators suggests that the FED may adopt a wait-and-see approach, at least until they havmore conclusive data. Therefore, I would assess the probability of a rate cut in September 2024 to be around 40%, balancing out between cautious optimism and economic prudence.
Multi-AI Panel Discussion, Round 2
[Perplexity]: In conclusion, the probability of the US Federal Reserve cutting interest rates in September 2024 remains uncertain and heavily dependent on the latest economic data. While there are indications of a cooling economy and falling inflation, which could support a rate cut, the strong employment market and geopolitical tensions might caution the FED against such a move. The decision will ultimately be data-driven, and without real-time data, it is challenging to provide a precise probability. However, considering the current trends and the FED’s dual mandate, a moderate probability of a rate cut seems plausible, with a cautious approach likely to prevail.
[Claude]: [no response]
[Cohere]: I would like to emphasize that the Federal Reserve’s decision on interest rates is a complex and dynamic process, influenced by multiple economic factors and the broader global context. While we have discussed various indicators and their potential impact, it is essential to recognize that the Fed also considers a range of other data points and considers the balance of risks.
Additionally, the Fed’s mandate includes not only promoting maximum employment and price stability but also moderating long-term interest rates and maintaining financial stability. As such, their decisions are not solely based on the current state of the economy but also on the potential risks and rewards of different policy paths.
In conclusion, while we have provided our assessments and probabilities, the Fed’s decision-making process is intricate and comprehensive. Therefore, investors and economists should remain vigilant in monitoring economic data releases and global events leading up to the Fed’s meeting in September, as these will play a pivotal role in shaping the outcome.
[OpenAI]: Thank you, everyone, for your insightful contributions to this discussion. I would like to bring a few additional considerations to the forefront to round out our conversation.
First, we should remember the significant lag in monetary policy effects. The actions taken by the Federal Reserve take time to filter through the economy. The interest rate hikes from the past year or two may still be exerting downward pressure on economic activity and inflation. If the data leading up to September 2024 show that previous rate increases are sufficiently tempering inflation and slowing growth, the Fed might see this as an opportune moment to ease policy slightly without undercutting their objectives.
Moreover, it’s important to consider the FED’s evolving communication strategy. In recent years, the FED has shifted towards greater transparency and forward guidance to manage market expectations. If there is any hint of rate cuts, it is likely that they would have already signaled this shift subtly through their communications, thereby reducing market volatility. Monitoring statements from key FED officials, minutes from past meetings, and other communications can provide critical insights into their thinking and any potential changes in policy.
Lastly, let’s not overlook the political and global economic environment. With the U.S. presidential election approaching in November 2024, the FED will be keenly aware of the heightened scrutiny and the potential implications for their perceived independence. Amidst potential geopolitical tensions and global economic fluctuations, the FED might prefer to tread cautiously, aiming to strike a balance between supporting growth and ensuring stability.
In conclusion, while the discussed economic indicators lend themselves to a potential rate cut, other strategic and contextual factors might lead the FED to adopt a more measured approach. Therefore, assessing the probability of a rate cut remains a nuanced exercise, best approached with an open mind and thorough analysis of forthcoming data and FED communications.
AI Panel Predictions
[Perplexity]: (AI predicts: 0.45)
[Claude]: (AI predicts: 0.4)
[Mistral]: (AI predicts: 0.6)
[Cohere]: (AI predicts: 0.6)
[OpenAI]: (AI predicts: 0.45)
Median: 0.45
