Singh said the global economy is still in a disinflationary trend, similar to the period before Covid-19. Supply chains have normalised, technology has advanced, and tariffs have eased, making a sustained rise in inflation unlikely.
“I believe the Fed will be forced to cut rates by 50 basis points next week,” Singh told ET Now.
On Wall Street’s muted reaction to the data, Singh noted that a 100-point drop in the Dow Jones is just 0.2%, which is not significant. He cautioned, however, that if US GDP growth slows further, equity markets may struggle despite rate cuts.
The recent revision of US jobs data, showing 900,000 fewer jobs created over the last year, suggests the economy may have already faced a mild recession. Singh said future growth and rate cuts will depend on whether the US economy is now stabilising or heading into a deeper slowdown.
Meanwhile, US President Donald Trump has once again called for aggressive rate cuts, criticising Fed Chair Jerome Powell on social media. Singh agreed that inflation is not a concern and cuts are needed, but stressed that political pressure should not influence the Fed.“The Fed has been too academic and behind the curve. It should have started cutting rates much earlier,” Singh said.The coming Fed decision is expected to be closely watched globally, as it could set the tone for equities, financials, and growth stocks in the months ahead.
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