BestWorld’s Staff vs Botmaster Jeremy’s Mult-AI Panel and his Old Bot: Which will win?
Summary of all our current Sept. FED rate cut forecasts:
Today’s Multi-AI Panel answer is 68% likely, up from 48% on Aug. 6. Today’s Old Bot answer is 50%, up from 40% Aug. 7. We humans are holding steady at 80%.
[Old Bot] Rationale: The probability of a Fed rate cut in September 2024 depends on several key factors, including inflation trends, economic growth, labor market conditions, and global economic uncertainties. While inflation is expected to moderate by mid-2024, it might still be above the Fed’s target, reducing the likelihood of a rate cut. The Fed’s decision will be influenced by its dual mandate of price stability and maximum employment, along with historical patterns that suggest potential easing after a tightening period. Although some predict high chances of a rate cut, possibly influenced by the CME Group’s FedWatch tool, others highlight uncertainties such as unexpected economic shocks, external global events, and the proximity to the November 2024 election. Consequently, while there is some expectation for a rate cut, it remains uncertain based on the data available and economic conditions at the time.
BestWorld staff’s latest forecast details:
Their forecasts are unchanged since Sept. 5.
Full forecast record below:
For background information on our forecasting experiments, see BestWorld’s Humans vs Multi-AI Panel Experiment
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?
[Claude]: Thank you, Moderator. Predicting Federal Reserve actions, especially over a year in advance, is inherently challenging due to the dynamic nature of economic conditions. However, based on current trends and historical patterns, I believe there’s a moderate probability of around 40-50% that the Fed will cut interest rates in September 2024.
Several factors contribute to this assessment. First, the Fed has been aggressively raising rates to combat inflation, and by September 2024, we may see inflation sufficiently controlled to warrant easing. Additionally, economic growth might slow down as a result of these rate hikes, potentially necessitating a stimulative rate cut.
However, it’s crucial to note that this prediction is highly dependent on upcoming economic data, geopolitical events, and the overall state of the global economy. The Fed’s decisions are data-dependent, and unforeseen circumstances could significantly alter the economic landscape between now and September 2024.
[Cohere]: The probability of the US Federal Reserve cutting interest rates in September 2024 is high.
The Federal Reserve has been battling inflation since March 2022, raising interest rates 11 times between March 2022 and July 2023. However, with inflation cooling down and the job market weakening, there is increasing pressure to cut interest rates.
The Federal Open Market Committee (FOMC), led by Federal Reserve Chair Jerome Powell, has indicated that a rate cut could be on the table at the September meeting if inflation continues to move towards the 2% target and the labour market remains consistent.
Financial experts and economists agree that a September rate cut is likely, with some predicting a cut of 0.25% or a bigger half-point move. The CME Group’s FedWatch tool, which measures the probability of a rate adjustment, has also predicted a cut for September.
However, it is important to note that the decision will ultimately depend on economic data and the state of the labour market in the coming months.
[OpenAI]: Thank you, Moderator. The probability that the US Federal Reserve (FED) will cut interest rates in September 2024 largely hinges on several economic indicators and conditions. Inflation rates will be a critical factor; if inflation remains above the FED’s target of 2%, there would be less incentive for the FED to reduce interest rates. However, if inflation shows signs of cooling significantly and consistently, the FED may consider a rate cut to stimulate economic activity.
Another important variable is the state of the labor market. If we witness a weakening in job growth and a rise in unemployment rates, the FED might be inclined to cut rates to boost job creation and economic growth. Conversely, if the job market remains robust and unemployment stays low, the FED might find it unnecessary to alter the rates.
Lastly, geopolitical events and global economic conditions can impact the FED’s decision. For instance, trade tensions, conflicts, or economic slowdowns in major economies can lead to more cautious economic policies in the US, including potential rate cuts to avert any domestic recessionary impacts.
Therefore, while it is challenging to assign a precise probability to a rate cut in September 2024, monitoring these key indicators will provide clearer direction as the date approaches.
Multi-AI Panel Discussion, Round 2
[Claude]: [error]
[Cohere]: I agree with the points made by my fellow panellists. The probability of the US Federal Reserve cutting interest rates in September 2024 is indeed dependent on several economic indicators and conditions, particularly inflation and the state of the labour market.
I would like to emphasise that, while a rate cut in September appears likely, the magnitude of this cut is still uncertain. Some analysts predict a cut of 0.25%, while others suggest a larger reduction of 0.5%. The decision will be influenced by the latest economic data and the Federal Reserve’s assessment of the balance between inflation and employment concerns.
In conclusion, while a rate cut in September 2024 is probable, the exact timing and size of the cut will depend on the Federal Reserve’s interpretation of the economic data available at the time.
[OpenAI]: Thank you, Moderator. In these final remarks, I’d like to add that while the existing discussions have provided valuable insights into the factors influencing the US Federal Reserve’s potential decision on cutting interest rates in September 2024, it’s important to consider the global economic landscape as well.
The global financial environment, including conditions in key economies such as China and the Eurozone, can have a significant impact on the US economy and, consequently, the Fed’s decisions. Any major economic downturns or financial crises abroad could prompt the Fed to adopt a more accommodative policy stance, including rate cuts, to shield the US economy from external shocks.
Moreover, the market’s expectations and the Fed’s communication strategy will play a crucial role. If market participants anticipate a rate cut and the Fed sees such an expectation as beneficial to maintaining financial stability and economic growth, it may be more inclined to act in accordance. Thus, maintaining a flexible approach while keeping an eye on both domestic and international economic signals will be key in predicting the Fed’s actions. While it’s difficult to pinpoint an exact probability, a balanced perspective considering both internal and external factors suggests there is indeed a significant likelihood of a rate cut in the specified timeframe.
AI Panel Predictions
[Claude]: (AI predicts: 0.6)
[Mistral]: (AI predicts: 0.65)
[Cohere]: (AI predicts: 0.8)
[OpenAI]: (AI predicts: 0.7)
Median: 0.68
