The U.S. Federal Reserve will cut interest rates by 25 basis points at each of the remaining three meetings of 2024, one more reduction than predicted last month, according to a slim majority of economists polled by Reuters who said a recession is unlikely.

Investors also said a violent, but brief market sell-off also was a driver of aggressive rate cut calls, related to the unwinding of large leveraged positions as a result of a sudden, sharp rise in the Japanese yen.

Although some Fed officials have hinted rate cuts are coming, most economists in the Aug. 14-19 Reuters poll were not expecting a rapid series of rate cuts. Recent data, including last week's strong retail sales report, suggests the economy is performing relatively well even as inflation recedes.

The U.S. central bank will cut the federal funds rate by 25 basis points in September, November and December taking the range to 4.50%-4.75% by end-2024, according to 54% of those polled, 55 of 101.

Markets, which were earlier betting on a half-percentage-point cut in September, are currently pricing around 70% probability of a quarter percentage point cut next month.

Over a third, 34 of those polled, predicted two rate cuts this year and one respondent forecast only one rate reduction. Eleven economists expected the Fed to cut rates by 100 basis points or more.

"The basis for the cuts that we have is mostly because inflation is coming down. It's not so much that activity is slowing ... We see a pretty resilient economy that's growing near trend and with that, we think inflation only ebbs gradually," said Jonathan Millar, senior U.S. economist at Barclays.

"The labor market is hanging in there just fine. It's gradually cooling, but we don't expect it to have really material weakening. The unemployment rate is maybe going to add another 10th or so from where it is. There's not really any reason for them (the Fed) to panic."

The unemployment rate is forecast at around the current 4.3% through 2026. Inflation is forecast to ease only slightly over the coming two years, according to median forecasts in the poll.

All measures of inflation polled - the Consumer Price Index, core CPI, personal consumption expenditures price index and core PCE - are expected to stay above 2% until at least 2026.