Recently, Wall Street investment banks have made new predictions about the future direction of the Fed's monetary policy. Analysts believe that the Fed may adopt a more aggressive interest rate cut strategy than the market expects.

According to the latest assessment, the Fed is expected to cut interest rates by 25 basis points at this month's meeting, and this is just the beginning. From now until December 2026, the Fed may continue to cut interest rates at every other meeting. This forecast indicates that the Fed's attitude towards the economic outlook may be more cautious than previously.

It is worth noting that the market has a new interpretation of Fed Chairman Powell's speech at the Jackson Hole meeting. The general view is that the Fed's future stance may be more accommodative, especially in the face of weak labor market data.

More notably, some teams of economists concluded after evaluating various scenarios that the weighted average interest rate path may be lower than previously expected. They predict that the federal funds rate may decline at a faster pace in 2025 and 2026, possibly dropping to a low of 2.25%. However, in the long run, the terminal interest rate may be slightly higher, around 2.75%.

If these predictions come true, they will have a profound impact on the global financial markets. Investors and policymakers need to closely monitor every move of the Fed and its potential effects on economic growth, inflation, and the job market.

With the continuous changes in the economic environment, the policy direction of the Fed will continue to be the focus of market attention. Economic data and developments in global events over the next few months may have a significant impact on the Fed's decisions.