BestWorld’s Staff vs Botmaster Jeremy’s Mult-AI Panel vs his Old Bot: Which Will Win?
Summary of all our current September FED rate cut forecasts: Today’s Multi-AI Panel answer is 70%, down from yesterday’s 75%. Old Bot is 85%, up from yesterday’s 70%. Our staffers remain at 83% median, 94% with extremizing via one of Prof. Barbara Mellers’ algorithms.
[Old Bot] rationale: There is a strong expectation that the US Federal Reserve will cut interest rates in September 2024 based on recent economic data and market predictions. Key factors include a significant decline in inflation to around the Fed’s 2% target, a weakening labor market, and explicit signals from Federal Reserve officials. Market tools like the CME Group’s FedWatch show a high probability of a rate cut, with widespread speculation of a quarter-point reduction. However, the prediction’s certainty is slightly tempered by the potential for unforeseen economic developments and the influence of unsubstantiated rumors.
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]: The probability of the US FED cutting interest rates in September 2024 is difficult to determine with certainty, as it depends on various economic factors and the Federal Open Market Committee’s (FOMC) assessment of the economy. However, there are several indicators that suggest a potential rate cut.
Firstly, the FED has held interest rates steady at 5.25%-5.50% for several months, providing some relief to the banking sector and the stock market. This pause in rate hikes indicates that the FED is closely monitoring economic conditions and may be considering a shift in policy.
Secondly, the FED’s primary concern, inflation, has shown signs of moderating. While it remains above the FED’s 2% target, the pace of inflation has slowed compared to its mid-2022 peak. This could influence the FED’s decision to cut rates, as they aim to balance their dual mandate of maximum employment and price stability.
Lastly, the labor market has shown signs of cooling, with the unemployment rate rising and monthly job growth slowing. This could be a significant factor in the FED’s decision, as a weaker job market may prompt them to stimulate the economy through rate cuts.
In summary, while it is challenging to predict the FED’s exact actions, the current economic landscape suggests a potential interest rate cut in September 2024. However, the extent of the rate cut will depend on the FED’s assessment of inflation, employment, and overall economic conditions.
[Claude]: Thank you, Moderator. As of September 2024, the probability of the Federal Reserve cutting interest rates this month is relatively low, in my assessment. The Fed has been cautious about rate cuts, wanting to ensure that inflation is consistently trending towards their 2% target before easing monetary policy.
Recent economic data has shown mixed signals. While there have been some signs of economic slowdown, the labor market remains relatively strong, and inflation, though moderating, is still above the Fed’s target. The Fed’s dual mandate of price stability and maximum employment means they must balance these factors carefully.
That said, global economic conditions and geopolitical tensions could potentially influence the Fed’s decision. If there are significant external shocks or a sharp deterioration in economic indicators in the coming weeks, it could increase the likelihood of a rate cut.
However, based on the current trajectory, I believe the Fed is more likely to hold rates steady this month, with potential cuts more probable in late 2024 or early 2025.
[Perplexity]: Given the current economic indicators and recent statements from Federal Reserve officials, the probability of the US FED cutting interest rates in September 2024 is extremely high. The latest jobs report, which showed a weaker-than-expected increase in nonfarm payrolls, has reinforced concerns about a slowdown in hiring and a cooling labor market. This, combined with inflation trending towards the Fed’s 2% target, has led many economists and policymakers to believe that a rate cut is necessary to support the economy.
Federal Reserve Governor Christopher Waller has explicitly backed an interest rate cut at the September meeting, citing the importance of supporting a weakening jobs picture. Additionally, market expectations, as reflected in the CME FedWatch tool, indicate a 100% probability of a rate cut, with a 70% chance of a 25 basis point reduction and a 30% chance of a 50 basis point cut. These indicators suggest that the Fed is likely to take action to stimulate the economy.
The consensus among experts and policymakers is that the Fed will cut interest rates in September, with the magnitude and frequency of future cuts dependent on the evolving economic situation. The recent data and statements from Fed officials have significantly increased the likelihood of a rate cut, making it almost certain that the Fed will take this step to support the economy.
[OpenAI]: Thank you. Given the current economic indicators and the recent statements from the Federal Reserve, the probability of a rate cut in September 2024 seems relatively low. As of now, inflation has moderated to a more controlled level, near the Fed’s target rate of 2%, but remains slightly above it. This would generally discourage immediate rate cuts as the Fed might want to be cautious about inflationary pressures re-emerging.
Additionally, the job market continues to show strong performance with low unemployment rates, and wage growth is stable. These factors do not indicate an urgent need for a rate cut.
Moreover, geopolitical tensions and uncertainties regarding international trade could still pose risks that would make the Fed more cautious about changing the current rate.
However, it’s important to note that the Fed’s decisions are also influenced by longer-term global economic conditions and unexpected events. If significant adverse economic developments arise, such as a severe global downturn or a sharp decline in domestic demand, the Fed might reconsider its stance. As things stand now, though, the more likely scenario is maintaining the current rates through September 2024.
Multi-AI Panel Discussion, Round 2
[Cohere]: The probability of the US FED cutting interest rates in September 2024 is a topic of much discussion and speculation. While some participants have argued that the likelihood is relatively low, others have stated that it is extremely high.
Recent comments from Federal Reserve Chair Jerome Powell have provided a strong indication that the central bank is preparing to cut interest rates in September. Powell stated that “the time has come for policy to adjust” and that the “direction of travel is clear,” suggesting a shift in the Fed’s stance. This aligns with the views of several Fed officials who have expressed support for a rate cut, citing the ebbing of inflation and concerns about the job market.
However, it is essential to consider that the Fed’s decision will be data-dependent, as Powell himself has emphasised. The Fed will closely monitor economic indicators, such as inflation trends and labour market conditions, to determine the timing and magnitude of any rate cuts.
In conclusion, while the probability of a rate cut in September 2024 is difficult to predict with certainty, the current economic landscape and the Fed’s recent statements suggest that it is a strong possibility. The Fed’s actions will be crucial in supporting the economy and maintaining a balance between price stability and maximum employment.
[Claude]: Thank you for the opportunity to provide closing remarks. After considering the points raised by other participants, I’d like to offer a nuanced perspective on the probability of a Fed rate cut in September 2024.
While some participants have cited recent statements from Fed officials, including Governor Waller and Chair Powell, as strong indicators of an imminent rate cut, it’s crucial to remember that the Fed’s decisions are highly data-dependent. The time between now and September 2024 is considerable, and economic conditions can change rapidly. The current signals suggesting a rate cut could be offset by unforeseen economic developments or external shocks.
That being said, the trend towards moderating inflation and concerns about potential economic slowdown do increase the likelihood of a rate cut. However, I would argue that the probability is not as high as some have suggested. The Fed has consistently demonstrated caution in its approach, particularly when it comes to rate cuts. They will likely want to see sustained evidence of inflation trending towards their 2% target and clear signs of economic weakness before making such a move.
In conclusion, while I believe the probability of a rate cut in September 2024 is significant, perhaps around 60-70%, it’s not a certainty. The Fed will continue to balance its dual mandate of price stability and maximum employment, and their decision will ultimately depend on the economic data available closer to the meeting date. It’s essential for observers and market participants to remain flexible in their expectations and continue monitoring economic indicators as we approach September 2024.
[Perplexity]: In light of the recent economic indicators and statements from Federal Reserve officials, it is clear that the probability of the US FED cutting interest rates in September 2024 is extremely high. The latest jobs report, which showed a weaker-than-expected increase in nonfarm payrolls, has reinforced concerns about a slowdown in hiring and a cooling labor market. This, combined with inflation trending towards the Fed’s 2% target, has led many economists and policymakers to believe that a rate cut is necessary to support the economy.
Federal Reserve Governor Christopher Waller has explicitly backed an interest rate cut at the September meeting, citing the importance of supporting a weakening jobs picture. Additionally, market expectations, as reflected in the CME FedWatch tool, indicate a 100% probability of a rate cut, with a 70% chance of a 25 basis point reduction and a 30% chance of a 50 basis point cut. These indicators suggest that the Fed is likely to take action to stimulate the economy.
Given the consensus among experts and policymakers, it is reasonable to conclude that the Fed will cut interest rates in September, with the magnitude and frequency of future cuts dependent on the evolving economic situation. The recent data and statements from Fed officials have significantly increased the likelihood of a rate cut, making it almost certain that the Fed will take this step to support the economy.
[OpenAI]: As we move to the conclusion of this discussion, I believe it is imperative to synthesize the various arguments presented and offer a balanced view on the probability of a Fed rate cut in September 2024. The prevailing divergence in opinions reflects the inherent uncertainty in economic forecasting and central bank policy decisions.
Firstly, while there are credible arguments for a rate cut, particularly centered around moderating inflation, potential economic slowdown, and recent statements from Fed officials, it is essential to emphasize the Fed’s history of data-dependent decision-making. The Federal Reserve’s mandate to ensure price stability and maximize employment means it must consider a plethora of economic indicators before making a move. Though some officials, like Governor Waller, support a rate cut, the Fed’s ultimate decision will likely depend on the labor market’s trajectory and inflation trends over the next months. It is worth noting that market tools such as the CME FedWatch, which reflect market sentiment, do suggest high probabilities of cuts, yet these are not definitive predictors of Fed action.
Secondly, external factors, including geopolitical tensions and global economic conditions, cannot be overlooked. These factors can introduce sudden shifts in economic outlooks, thereby impacting the Fed’s considerations. Although several participants have highlighted signals pointing to a strong probability of a cut, it’s equally plausible that unforeseen developments could sway the Fed to maintain rates.
In conclusion, the current evidence does lean towards a probable rate cut in September 2024, driven by emerging economic trends and supporting statements from Fed officials. However, I would argue that while the likelihood is indeed substantial, it remains far from certain. A probability estimate around 60-70%, as Claude suggested, appears balanced and takes into account the data-dependency and the potential for unexpected economic changes. The Fed’s cautious approach will mean that any definitive action will only be confirmed as we approach the decision timeline with more clarity on economic indicators.
AI Panel Predictions
[Perplexity]: (AI predicts: 0.85)
[Claude]: (AI predicts: 0.75)
[Mistral]: (AI predicts: 0.65)
[Cohere]: (AI predicts: 0.65)
[OpenAI]: (AI predicts: 0.7)
Median: 0.7
