Wants a gradual and methodical course of rates cutsCurrent monetary policy is in a good place, not overly restrictiveEnd of easing cycle may put Fed funds around 3%Business contacts favor a predictable pace of cuttingFed rate cuts will likely ease housing sector pressureUnemployment likely to rise to just below 5%Continues to watch commercial real estate sectorsJob market has now mostly normalized
The bolded is the real crux of the argument for me. ‘Around 3%’ is a broad range but it’s a critical input to be thinking about for USD, especially as compared to other central banks who will go to 2% or lower. Then the question is: If the US economy slows to 1% with 1.9% inflation, will the Fed go below 3%?
This article was written by Adam Button at www.forexlive.com.
