The Fed is likely to keep cutting interest rates, but multiple dangers lurk, CNBC survey finds

Core Viewpoint - The Federal Reserve is anticipated to lower interest rates by a quarter point in the upcoming meeting, with potential cuts in the following two meetings as well, according to the October CNBC Fed Survey [1]. Group 1: Survey Insights - Among the 38 survey respondents, there are concerns regarding the lack of data from the government shutdown, the artificial intelligence bubble, persistent inflation, and the influence of politics on the Fed's decisions [2]. - While 92% of respondents believe the Fed will cut rates in the upcoming meeting, only 66% believe it is the right decision, with a 38% minority opposing a rate cut [3]. Group 2: Economic Conditions and Predictions - Richard Bernstein, CEO of Richard Bernstein Advisors, noted that political factors are influencing the Fed's rate decisions, despite financial conditions being historically easy, GDP tracking at 3.5-4%, and inflation remaining above the Fed's target [4]. - Following the anticipated cut, 84% of respondents expect another reduction in December, and 54% foresee a third cut in January, with a total of 100 basis points of cuts forecasted for this year and next, bringing the funds rate down to 3.2% by the end of 2026 [4]. Group 3: Perspectives on Rate Cuts - Some experts argue against rate cuts, while others advocate for larger cuts due to increasing recession risks from labor market weakness and the government shutdown [5]. - Allen Sinai, chief economist and strategist at Decision Economics, emphasized that the ongoing productivity boom is a key factor in the economy's resilience and the strong equity market performance, which he does not consider a bubble [5].