Viewpoint: The Intrerest Rate should gradually approach 3%, and the extent of this month's rate cut is not crucial.

On September 15, investment management company Payden & Rygel stated that whether the Fed lowers interest rates by 25 basis points or 50 basis points this week is just a "minor disagreement," and the key issue is that the current labor market is in a fragile balance—this is drastically different from the situation in 2024. To avoid a collapse of the balance, the Fed should "move to cut rates as soon as possible," as suggested by Governor Waller in a recent speech. Payden & Rygel's economic outlook for the next 12-15 months indicates that the federal funds rate should gradually approach 3%, while the current target range set by the Fed for the federal funds rate is 4.25%-4.50%.(Jin10)