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 75%, up from Friday’s 65%. Old Bot is 52.5%, down from yesterday’s 70%. Our staffers are up to 83% median, 94% with extremizing via one of Prof. Barbara Meller’s algorithms.
[Old Bot] rationale: A summary of what the various AIs considered is as follows: The Federal Reserve is highly likely to cut interest rates in September 2024 due to several factors such as the weakening labor market, with rising unemployment and slower wage growth, as well as inflation nearing the Fed’s 2% target. Signals from regional Federal Reserve leaders and Wall Street economists further support this anticipation, with market expectations aligning towards rate cuts. While historical trends and cyclical patterns also suggest a propensity towards reducing rates, there remains some uncertainty due to the potential for unforeseen economic events or geopolitical developments.
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 high. The Federal Reserve has been signalling that it is ready to cut interest rates, citing easing inflation and a weakening job market. The Fed’s July 30-31 meeting minutes revealed that a “vast majority” of officials said an interest rate cut in September was likely.
The Fed’s benchmark interest rate has been at a 23-year high of 5.25% to 5.5% since July 2023. The Fed has been cautious about cutting rates, wanting to ensure that inflation is on a sustainable path back to its 2% target. However, recent data has shown that inflation has eased, with the consumer price index falling to 2.9% in July, the lowest level in three years.
The Fed’s decision to cut rates will depend on the incoming data and the evolving economic outlook. While most forecasters expect a quarter-point reduction, some economists have suggested a half-point cut might be on the table if inflation continues to ease and the job market weakens further.
[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 in its approach to monetary policy, carefully balancing inflation concerns with economic growth.
Recent economic indicators have shown mixed signals. While inflation has moderated from its peak, it remains above the Fed’s 2% target. The labor market has remained resilient, with unemployment rates hovering near historic lows. These factors suggest that the Fed may not feel an urgent need to stimulate the economy through rate cuts.
However, it’s important to note that global economic conditions and geopolitical events can rapidly shift the economic landscape. The Fed will be closely monitoring these factors, along with domestic economic data, in making its decision. If there are sudden signs of economic weakness or deflationary pressures, the probability of a rate cut could increase. As it stands, though, I believe the Fed is more likely to maintain its current stance or potentially consider a cut later in the year or in early 2025.
[Perplexity]: Thank you for the opportunity to share my insights. Based on recent economic data and statements from Federal Reserve officials, I believe the probability of the US FED cutting interest rates in September 2024 is high. The current federal funds rate is at a 23-year high of 5.25%-5.50%, and with inflation trending towards the Fed’s 2% target and the labor market showing signs of cooling, the conditions are ripe for a rate cut.
Federal Reserve Chairman Jerome Powell has signaled a clear intention to adjust monetary policy to less restrictive conditions, hinting at a rate cut in September during his speech at the Jackson Hole Economic Symposium. Additionally, various economists and financial institutions, such as Goldman Sachs and Citi Bank, are predicting a rate cut in September, with some even suggesting multiple cuts by the end of the year.
Given these indicators, I would estimate the probability of a rate cut in September to be around 75-80%, aligning with market expectations and recent economic trends. This move would aim to alleviate the financial burden on households and businesses due to high borrowing costs and support economic stability. I look forward to hearing the perspectives of my fellow panelists.
[OpenAI]: [Assistant] Thank you, Moderator. Given the current economic climate, the probability of the US Federal Reserve cutting interest rates in September 2024 hinges on several key factors. Primarily, recent inflation reports have shown that inflation is trending downward, but still above the Fed’s 2% target. This suggests that while progress is being made, it might not be enough to prompt an immediate rate cut. Furthermore, labor market indicators remain mixed, with unemployment rates steady but job creation slowing down. These mixed signals could lead the Fed to adopt a wait-and-see approach rather than immediately reducing rates.
Equally important are external factors such as global economic conditions and geopolitical risks.
The ongoing tensions in various parts of the world, coupled with slowdowns in major economies like China and the European Union, could potentially impact the US economy indirectly. If these external risks escalate, the Fed might consider a rate cut to hedge against potential downturns. However, if these risks are perceived as manageable, the Fed may choose to hold steady to avoid encouraging speculative bubbles in financial markets.
Market expectations also play a crucial role. Futures markets currently show a divergence in opinions, with some investors betting on a rate cut while others expect rates to remain unchanged for the time being. The Fed typically does not want to surprise markets unnecessarily, so their decision will likely aim to maintain stability. In conclusion, while there are arguments both for and against a rate cut, the current data suggests that the Fed is more likely to hold off on cutting rates in September 2024 unless there is a significant deterioration in economic indicators.
Multi-AI Panel Discussion, Round 2
[Cohere]: The probability of the US FED cutting interest rates in September 2024 is high, but the extent of the cut will depend on the state of the economy.
The Federal Reserve has been signalling that it is ready to cut interest rates, citing easing inflation and a weakening job market. The Fed’s July 30-31 meeting minutes revealed that a “vast majority” of officials said an interest rate cut in September was likely.
The Fed’s benchmark interest rate has been at a 23-year high of 5.25% to 5.5% since July 2023. The Fed has been cautious about cutting rates, wanting to ensure that inflation is on a sustainable path back to its 2% target. However, recent data has shown that inflation has eased, with the consumer price index falling to 2.9% in July, the lowest level in three years.
The Fed’s decision to cut rates will depend on the incoming data and the evolving economic outlook. While most forecasters expect a quarter-point reduction, some economists have suggested a half-point cut might be on the table if inflation continues to ease and the job market weakens further.
The Fed’s next policy meeting is on September 17-18, 2024, and analysts had initially expected the central bank to continue to hold rates steady. However, bearish sentiment and a series of sharp down moves in stocks has led many traders to now price in a rate cut by September, with
[Claude]: Thank you for the opportunity to provide closing remarks. After considering the perspectives shared by my fellow panelists, I’d like to emphasize a few key points regarding the probability of a Fed rate cut in September 2024.
Firstly, while there are strong indications that the Fed is moving towards a more accommodative stance, the timing of rate cuts remains highly dependent on incoming economic data. The Fed’s dual mandate of price stability and maximum employment will continue to guide their decision-making. Recent trends in inflation and labor market data are encouraging, but the Fed will likely want to see sustained progress towards their 2% inflation target before implementing rate cuts.
Secondly, it’s crucial to consider the global economic context. As some panelists have noted, geopolitical tensions and economic slowdowns in major economies could influence the Fed’s decision. If these external risks escalate and threaten to impact the U.S. economy significantly, it could increase the likelihood of a rate cut in September 2024. However, the Fed must also balance this against the risk of reigniting inflationary pressures or creating asset bubbles.
Lastly, while market expectations are important, the Fed has demonstrated its willingness to act independently of market pressures when necessary. Therefore, while current market pricing and analyst predictions are valuable indicators, they should not be seen as definitive. The Fed will ultimately make its decision based on a comprehensive analysis of economic conditions and its assessment of the risks to its dual mandate objectives.
[Perplexity]: In conclusion, I would like to emphasize that the majority of indicators suggest a high probability of the US FED cutting interest rates in September 2024. The Federal Reserve has been signaling a readiness to cut rates, citing easing inflation and a weakening job market. Recent data has shown that inflation has eased, with the consumer price index falling to 2.9% in July, the lowest level in three years, which aligns with the Fed’s 2% target.
Federal Reserve Chairman Jerome Powell has clearly indicated a willingness to adjust monetary policy to less restrictive conditions, hinting at a rate cut in September during his speech at the Jackson Hole Economic Symposium. Moreover, various economists and financial institutions, such as Goldman Sachs and Citi Bank, are predicting a rate cut in September, with some even suggesting multiple cuts by the end of the year.
Given these indicators, I would estimate the probability of a rate cut in September to be around 75-80%, aligning with market expectations and recent economic trends. This move would aim to alleviate the financial burden on households and businesses due to high borrowing costs and support economic stability.
It is crucial to note that while external factors such as global economic conditions and geopolitical risks could influence the Fed’s decision, the current data and signals from the Fed suggest a strong likelihood of a rate cut in September 2024. The Fed’s next policy meeting on September 17-18, 2024, will provide further clarity on this matter.
[OpenAI]: Thank you, Moderator. To wrap up this discussion, I’d like to address the varied perspectives presented and offer some additional insights.
First, while the easing of inflation and the weakening job market are critical factors pointing towards a potential rate cut, it’s essential to consider the broader context of economic stability. If inflation continues to stay above the Fed’s 2% target, even marginally, coupled with a still-resilient labor market, the Fed might opt for a more conservative approach. This could entail delaying rate cuts to avoid premature easing of monetary policy that might reignite inflationary pressures.
Second, the global economic landscape cannot be ignored. Geopolitical tensions or economic slowdowns in key global markets like China and the European Union could significantly influence the Fed’s decisions. A worsening global economic scenario might push the Fed to opt for rate cuts to cushion the US economy from external shocks. Conversely, if these risks are perceived as contained, the Fed might hold the current rates longer to ensure domestic instability is not exaggerated by premature cuts.
Lastly, while analyst predictions and market sentiments are influential, history has shown that the Fed bases its decisions on rigorous data analysis and not purely on market pressures. Therefore, while there is a high probability of an interest rate cut in September 2024, it is crucial to remember that this is contingent on continuous favorable economic data leading up to the decision date. Overall, the Fed’s careful consideration of all these factors will be paramount in their September 2024 policy decision.
To summarize, while there is a solid case for expecting a rate cut due to easing inflation and a slowing job market, the final decision will depend on sustained economic trends, external factors, and the Fed’s overarching aim to maintain economic stability without reigniting inflation.
AI Panel Predictions
[Perplexity]: (AI predicts: 0.8)
[Claude]: (AI predicts: 0.75)
[Mistral]: (AI predicts: 0.75)
[Cohere]: (AI predicts: 0.75)
[OpenAI]: (AI predicts: 0.75)
Median: 0.75
