Fed‘s Data Revision Sparks Debate Over Rate Cut Timing
OSLO, Norway – A revision to preliminary U.S. economic data by the Federal Reserve is fueling discussion among economists about the pace of potential interest rate cuts, with some believing the move signals a cautious approach from the central bank. Kyrre Aamdal, senior economist at DNB Carnegie, suggests the adjustment isn’t linked to recent leadership changes at the Fed, but rather a standard procedure to align data releases.
The Fed’s decision to refine its data before final publication-a practice Aamdal describes as “synchronizing the survey with other data that is more thoroughly prepared”-has prompted speculation that the central bank may be deliberately tempering expectations for aggressive monetary easing.While preliminary figures will receive a final adjustment in february, the revised data offers a clearer picture of economic conditions. This comes as the Fed has previously indicated a potential for fewer economic releases, which could reinforce expectations of measured interest rate reductions.
Aamdal told E24 that the month-to-month changes in the running figures are the most significant indicator. He expressed greater confidence in a gradual series of rate cuts than the possibility of a double cut in September, stating, “It is more in line with the Fed signals that they will go slowly.”
The economist emphasized this is a standard procedure, noting the Fed has hinted at potentially fewer data events, which could reinforce expectations of interest rate cuts.
