According to the latest economic observation, the US monetary policy may undergo a significant shift. Kathy Bostjancic, Chief Economist at Nationwide, recently published a striking forecast report, suggesting that the Federal Reserve is likely to cut interest rates by a cumulative 75 basis points before the end of the year.

Bostjancic pointed out that recent remarks by Federal Reserve Chairman Powell exhibit a clear dovish tendency, which opens the door for a possible rate cut in September. She analyzed that Powell seems to have realized that the downside risks facing the job market are significantly increasing.

Based on this judgment, Bostjancic expects that the Federal Reserve may cut interest rates by 25 basis points next month. More notably, she further speculates that by the end of this year, the cumulative rate cuts by the Federal Reserve could reach 75 basis points.

The reason supporting this bold prediction is that Bostjancic believes the labor market will continue to weaken. While inflation may rise, she thinks this upward trend could be only moderate and temporary.

If this prediction comes true, it will have a profound impact on the financial markets and the overall economy. Investors and businesses may need to reassess their strategies to adapt to the new monetary policy environment that may emerge. However, we should also view such predictions with caution, as the economic situation is ever-changing, and the Federal Reserve's decisions will depend on the performance of economic data in the coming months.