The former Vice President of the FED revealed his prediction regarding Wednesday's Interest Rate Decision! Critical Forecasts

Roger Ferguson, the former vice chairman of the FED, stated in an appearance on CNBC's "Squawk Box" program that a rate cut by the FED is not expected at this week's meeting.

Ferguson stated that the central bank is operating in a "wait-and-see" mode under the current economic conditions and needs to act patiently.

Ferguson said, "The FED will not make a rate cut in this meeting, or perhaps even in the next one. They hope for further decline in inflation, but they will remain cautious." He stated that the FED's announcements this week will convey messages of being "vigilant and patient" to the market, and this situation could disappoint some sectors.

Ferguson stated that the "rebate" defined as a "good interest rebate," which occurs solely due to a decrease in inflation without a slowdown in the economy or a disruption in the labor market, does not seem likely to happen this year. "The FED has come very close to a soft landing this year, but there are still many risks. Perhaps a clearer picture will emerge next year, and if inflation continues to decline, a limited interest rebate may come onto the agenda," he said.

In the program, the geopolitical risks in the Gulf and the possible effects of oil prices were also discussed. Ferguson argued that the increases in oil prices have not yet reflected in core inflation, but this could change, and therefore the FED should be cautious.

After the servers reminded President Trump's approach of "cut rates now while inflation is low, and if necessary, raise them again later," Ferguson took a cautious stance on the proposal. "In the past, the tendency for inflation to decline was short-lived. Additionally, there is a risk of inflation expectations deteriorating. The FED was late in addressing inflation in the previous cycle. They wouldn't want to make the same mistake again," he said.

*It is not investment advice.

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