There is strong case for using projection meetings to recalibrate policy stanceHigh uncertainty warrants a data-dependent approachDisinflation process remains bumpyNot all the signs are green yet when it comes to core inflationRecent shift in market expectations shows that the road to meet inflation target is bumpyWe can look through small deviations from target as long as we respond especially forcefully to larger deviations
In other words, he’s sort of backing the idea of one or two more rate cuts for the year. As for the market pricing, traders are seeing ~40 bps of rate cuts still to come for the remainder of 2024. The odds of the next move being in September are ~55% while an October move is priced at ~94% odds currently.
This article was written by Justin Low at www.forexlive.com.
