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 76%, slightly up from yesterday’s 70%. Old Bot today is 35%, way down from 65% yesterday. We humans remain steady at 80%.
[Old Bot] rationale: The Federal Reserve is considering cutting interest rates as early as September 2024, with a significant number of officials indicating readiness to start a rate-cutting cycle if economic data supports such a move. Factors influencing this decision include high inflation rates, the Fed’s 2% inflation target, potential economic slowdown, labor market conditions, global economic uncertainties, and the Fed’s cautious historical approach. While there is speculation and even a 76% probability estimate of a rate reduction by 0.25 percentage points in September, the overall likelihood is tempered by the need to firmly control inflation and economic stability concerns, suggesting the possibility but not certainty of a rate cut.
More about our staff vs bots competition here —>
Our staff forecasts are below. Note that our spreadsheet also includes some of our bots.
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?
[Cohere]: As of 29 August 2024, the probability of the US Federal Reserve cutting interest rates in September 2024 appears to be high.
The Federal Reserve has been battling inflation for over two years, raising interest rates 11 times between March 2022 and July 2023. However, with inflation cooling and the job market weakening, there is growing speculation that the Fed will cut interest rates at its next meeting in September.
The consumer price index fell to 3% in June, the lowest in three years, and the Fed has signalled that it wants more positive data before cutting rates. The CME Group’s FedWatch tool, which predicts the probability of a rate adjustment, has placed the likelihood of a cut in September at nearly 100%.
Federal Reserve Chair Jerome Powell has stated that a rate cut in September could be on the table if inflation continues to move towards the Fed’s 2% target and economic growth remains strong. Powell emphasised that the decision will be driven by data and not politics, despite the proximity of the September meeting to the US elections.
Economists and investors largely anticipate a rate cut in September, with some predicting additional cuts in November and December. However, the
[Claude]: Thank you, Moderator. As of August 2024, the probability of a Federal Reserve interest rate cut in September 2024 appears relatively low, but not entirely off the table. The Fed’s decisions are heavily data-dependent, and we’ve seen a mixed bag of economic indicators over the past few months.
Inflation has been gradually trending downward, but it’s still above the Fed’s 2% target. The labor market remains resilient, with unemployment hovering around 3.8%. These factors suggest that the Fed may not feel an urgent need to cut rates. However, we’ve also seen some signs of economic slowdown in certain sectors, particularly in housing and manufacturing.
Given these conflicting signals, I’d estimate the probability of a rate cut in September 2024 at around 30-35%. The Fed will likely want to see more consistent evidence of cooling inflation and economic moderation before making such a move. Additionally, with the presidential election coming up in November 2024, the Fed may be extra cautious about any policy changes that could be perceived as politically motivated.
[Perplexity]: Thank you for the opportunity to share my thoughts. Based on recent developments and statements from Federal Reserve officials, I believe the probability of the US FED cutting interest rates in September 2024 is quite high. Federal Reserve Chair Jerome Powell has given strong indications that the central bank is ready to adjust its policy stance, citing the cooling of inflation and the labor market. Specifically, he noted that the upside risks to inflation have diminished, and the downside risks to employment have increased, suggesting that the time has come for policy to adjust.
Furthermore, the minutes of the Fed’s July meeting revealed that a “vast majority” of policymakers support a rate cut in September if inflation continues to cool. This sentiment is also reflected in market expectations, with investors estimating a 76% probability of a 0.25 percentage point reduction in interest rates in September. Additionally, several regional Federal Reserve bank presidents have expressed a willingness to start a rate-cutting cycle to alleviate the financial burden on households and businesses due to high borrowing costs.
Given these indicators, I would estimate the probability of a rate cut in September to be around 80%. This move would likely stimulate the economy, encourage consumer spending and business investment, and provide a boost to financial markets. However, it’s important to note that the Fed’s decision will ultimately depend on incoming data and the evolving outlook, so there is always a degree of uncertainty involved.
[OpenAI]: Thank you, Moderator. As of August 29, 2024, assessing the probability of a US Federal Reserve interest rate cut in September depends largely on the economic indicators and recent statements from the Fed officials. Current metrics such as inflation rate, employment figures, GDP growth, and consumer spending are crucial in making this determination. Presently, inflation seems to be stabilizing around the Fed’s target, while the labor market shows signs of slight cooling but remains robust.
According to recent minutes from the Fed’s meetings, the stance has been one of caution and a desire to see more data before making significant policy shifts. The Fed has consistently reiterated that its decisions will be data-dependent. The slowing inflation paired with still-strong job numbers suggests that the Fed might opt to maintain rates to avoid jolting the economy unnecessarily and to ensure inflation does not surge back.
In terms of market expectations, futures and other financial instruments are showing mixed signals. While some market participants are betting on a rate cut considering the recent slowdown in manufacturing and global economic tensions, there’s no clear consensus. Given the current mixed economic signals and the Fed’s cautious approach, I would assess the probability of an interest rate cut in September as moderate but not high—perhaps around 30-40%.
Multi-AI Panel Discussion, Round 2
[Cohere]: As we approach the pivotal month of September, the probability of an interest rate cut by the US Federal Reserve remains a topic of much debate. While my fellow panelists have presented insightful arguments, I would like to emphasize a few key points that suggest a rate cut is indeed likely, but with a few caveats.
Firstly, the Fed’s primary mandate is to maintain price stability and maximum employment. With inflation cooling down and approaching the Fed’s target, the urgency to continue with aggressive rate hikes diminishes.
Additionally, the labor market, while still robust, is showing early signs of softening. This dynamic gives the Fed some leeway to adjust rates without risking a surge in inflation or an abrupt economic slowdown.
However, it is essential to recognize that the Fed’s actions are driven by data, and the economic landscape can quickly shift. For instance, external factors such as geopolitical tensions, global economic growth, or unexpected domestic events could influence the Fed’s decision. Therefore, while the probability of a rate cut in September appears relatively high, it is not a certainty. The Fed will likely continue to assess the situation and make a data-driven decision closer to the date.
[Claude]: Thank you for the opportunity to provide closing remarks. I appreciate the insights shared by my fellow panelists, and I’d like to add a few additional points to consider regarding the probability of a Fed rate cut in September 2024.
First, it’s important to note that the economic landscape can change rapidly, and projections made a year in advance are inherently uncertain. While current indicators and Fed statements suggest a high likelihood of a rate cut, unforeseen economic shocks or geopolitical events could alter the Fed’s calculus. The central bank has consistently emphasized its data-dependent approach, so we must remain vigilant in monitoring incoming economic data up until the September meeting.
Second, the proximity of the September 2024 meeting to the November presidential election adds an extra layer of complexity to the Fed’s decision-making process. While the Fed strives to maintain political independence, it may be particularly cautious about making significant policy changes so close to a major election to avoid any perception of political influence. This factor could potentially lower the probability of a rate cut in September, even if economic conditions warrant one.
Lastly, I’d like to emphasize the importance of considering the global economic context. The Fed’s decisions don’t occur in a vacuum, and international economic conditions, particularly those of major trading partners and global financial markets, can influence its policy choices. A synchronized global economic slowdown or unexpected strength in other major economies could impact the Fed’s decision on whether to cut rates in September 2024.
[Perplexity]: Thank you for the opportunity to provide closing remarks. I appreciate the insights shared by my fellow panelists, and I’d like to add a few additional points to consider regarding the probability of a Fed rate cut in September 2024.
First, it’s important to note that the economic landscape can change rapidly, and projections made a year in advance are inherently uncertain. While current indicators and Fed statements suggest a high likelihood of a rate cut, unforeseen economic shocks or geopolitical events could alter the Fed’s calculus. The central bank has consistently emphasized its data-dependent approach, so we must remain vigilant in monitoring incoming economic data up until the September meeting.
Second, the proximity of the September 2024 meeting to the November presidential election adds an extra layer of complexity to the Fed’s decision-making process. While the Fed strives to maintain political independence, it may be particularly cautious about making significant policy changes so close to a major election to avoid any perception of political influence. This factor could potentially lower the probability of a rate cut in September, even if economic conditions warrant one.
Lastly, I’d like to emphasize the importance of considering the global economic context. The Fed’s decisions don’t occur in a vacuum, and international economic conditions, particularly those of major trading partners and global financial markets, can influence its policy choices. A synchronized global economic slowdown or unexpected strength in other major economies could impact the Fed’s decision on whether to cut rates in September 2024.
[OpenAI]: Thank you, Moderator. To wrap up, I would like to focus on a few nuanced aspects that could impact the Federal Reserve’s decision-making process as we consider the likelihood of a rate cut in September 2024.
Firstly, we should scrutinize the Fed’s dual mandate—maximum employment and stable prices—more closely in the context of the current economic data. While inflation is approaching the Fed’s 2% target, the labor market, despite showing signs of weakening, remains relatively strong. This could lead to internal debate within the Fed, weighing the benefits of stimulating a potentially overheating economy against preemptively guarding against future inflationary pressures. It’s worth mentioning that too hasty a move could undermine the credibility the Fed has worked hard to rebuild post-2022 rate hikes.
Secondly, both the election-year dynamics and geopolitical influences could play a significant role. The Fed’s commitment to being apolitical is essential, but any major economic disturbances or market instability—domestic or global—near the election period could force its hand. Participants should, thus, consider externalities like trade tensions, energy prices, and other global economic trends as significant drivers that add volatility to these predictions.
Lastly, the diversity of opinions among regional Fed presidents and members within the FOMC itself cannot be overlooked. The minutes from their meetings often reveal a rich tapestry of views, showing that predictions based on the statements of a few key figures, like Chair Powell, might not capture the full spectrum. In summary, while the signs currently favor a rate cut, I’d advise a cautious approach to prediction, keeping in mind the fluidity of economic data and external factors.
I’d place the likelihood of a September 2024 rate cut at around 50%, pending this evolving data landscape.
AI Panel Predictions
[Perplexity]: (AI predicts: 0.8)
[Claude]: (AI predicts: 0.65)
[Mistral]: (AI predicts: 0.7)
[Cohere]: (AI predicts: 0.7)
[OpenAI]: (AI predicts: 0.65)
Median: 0.7
