Let’s take a step towards neutral, recognizing that we’re tightLots of ambiguity around what neutral level isFed policy is still in net tight positionLabor market is strong, want to keep it that way50 bps was a meaningful step to get process movingNo one on the committee was saying we should be holding ratesThere’s a lot of uncertainty about where Fed will cut toThe jobs market is a lousy forecaster of inflationSays he pencilled in 50 bps more in easing in 2024
There’s a clear playbook here where the Fed plans to cut another 25 at future meetings but will cut more if there’s any deterioration.
This article was written by Adam Button at www.forexlive.com.
