Recent economic data is consistent with Fed projectionsMonetary policy is well positioned, is somewhat restrictiveInflation data since Sept has been ‘a touch higher’ and economy ‘a touch stronger’ than expectedHopes disinflation process will continue but lots of uncertaintyNext year expects growth to slow to 2%, steady unemployment rateIt’s all about getting policy well positioned for whatever comes next yearThere is a lot of uncertainty around future fiscal policyI expect slowing immigration into the US, we’ll see about fiscal and trade policyI’ve incorporated some of that into my forecastsMy estimate is that neutral is 0.25 pp above pre-pandemicI think we’re “pretty restrictive”, notes steady cooling of the labor market over two years
This article was written by Adam Button at www.forexlive.com.
