Investors Split on Whether Fed Should Cut Interest Rates

This week’s Sentiment Survey special question asked AAII members if the Federal Open Market Committee (FOMC) should cut rates at its July meeting. Opinions were split. Slightly more than half of all respondents (53%) say no, the Fed should not lower rates. Conversely, nearly 40% of respondents say yes, rates should be cut. Those in the “no” camp cite sustained economic growth, the current lack of inflation, the need to save cutting rates for the next recession and not reacting to political pressure. Those in the “yes” camp cite the need to offset the trade war, fending off deflationary threats and keeping the economic expansion from weakening.

Here’s a sampling of the responses:

• “No. Hold that ace until it’s needed.”
• “Yes, the economy is slowing with tariffs being part of the slowdown.”
• “No. The Fed should only cut rates if the economy is slowing, not because the president wants it.”
• “Yes, the world needs to fight deflation.”
• “No, not until there are real signs of an economic slowdown.”

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