- Let’s take a step towards neutral, recognizing that we’re tight
- Lots of ambiguity around what neutral level is
- Fed policy is still in net tight position
- Labor market is strong, want to keep it that way
- 50 bps was a meaningful step to get process moving
- No one on the committee was saying we should be holding rates
- There’s a lot of uncertainty about where Fed will cut to
- The jobs market is a lousy forecaster of inflation
- Says 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. Source