The U.S. election will be a 'pocketbook' one, says Forbes Media chairman

Steve Forbes doesn’t expect the Federal Reserve to raise rates in upcoming meetings, but the Forbes Media chairman doesn’t see cuts in the near term either.

“I think the Federal Reserve is not going to increase interest rates in the next few months. I think they’re going to pause,” Forbes said, citing the slew of contradictory U.S. economic data.

“Some things are weakening, the labor market usually is a lagging indicator. But the services [sector] report was pretty good,” he told CNBC’s Chery Kang on the sidelines of the Forbes Global CEO Conference held in Singapore.

“So that mixed picture gives them [an] excuse finally to do nothing,” he said.

The Federal Open Market Committee’s next meeting is scheduled for Sept. 19 to 20. There’s a 92% chance the central bank will leave rates unchanged after its September meeting, according to the CME’s FedWatch tool. But those probabilities shift to a 38.4% chance of a hike after the November meeting.

The Fed started its aggressive rate hike campaign in March 2022 as inflation climbed to its highest levels in 40 years.

On government shutdown and elections

When asked whether the U.S. faces a potential government shutdown, Forbes said he reckons one may be looming.

Funding for the federal government is set to run out at the end of the month unless Congress takes action. Failure to pass spending legislation would result in a shutdown on Sept. 30.

Forbes said that Washington will go “right to the deadline” before coming up with a deal.

“But the danger on these things, [when] we’re gonna keep getting close to the cliff is you might slip and go over the cliff. You might get a government shutdown,” he said.

Forbes also said he expects the 2024 elections to be about the “pocketbook,” with the state of the economy being “issue No. 1.”

Other issues will include crime and foreign policy, such as Washington’s standing on the global stage as well as its approach toward Ukraine.

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