Why US Fed is going to go for a 50 bps cut? Manish Singh explains

economictimes.indiatimes.com:

Manish Singh, Market Expert, says the reason the Fed is going to cut by 50 bps and why it should cut 50 bps is that if the inflation is on track to be at 2%, (it is at 2.5% now), what justifies the rates being this restrictive, as we have seen the most rapid increase in rates in the last 40 years. The rates have been at 5.25% for 14 months. What justifies it being at this high restrictive level? There is no point. So, for that reason you are going to get 50 basis point cut.

While most analysts were holding the view that the American economy is fine, there is no recession right now or even on the horizon, a soft landing with a 25 basis point cut was turning up to be the consensus view. But now things have slightly changed in the run-up to the FOMC meet. Have not they? A 50 basis point rate cut does not seem completely unlikely.
Manish Singh: No, it is not unlikely and we are going to get that and it is justified. Because if you look at where the two-year rate is, the two-year treasury yield is at 3.57% and the upper bound of the Fed fund rate is 5.5%, so we are talking about 190 basis point spread. You have to go back to 2008 to see the spread this wide.

Of course, at that time, you know that there was a crisis going on and we got 75 basis point cuts. Now, of course, we are not going to get 75 basis point cuts now because there is no crisis going on. But the reason why I think Fed is going to cut 50 and why it should cut 50 is that if the inflation is on track to be at 2%, it is at 2.5% now, what justifies the