The Fed is stuck between its dual mandate
https://www.ft.com/content/175aa1d7-beff-48bc-821d-038c2936760b
A cautious rate cut this week would maintain the US central bank’s flexibility.
My recommendation:
A potentially K-shaped economy creates dilemmas for the Fed
https://thehill.com/opinion/finance/5499218-ai-revolution-job-market
Given the balance of risks, the Fed will likely cut rates by 50 or 75 basis points before the end of 2025. However, it needs to balance short-run pressing demands with potential long-term threats to its credibility. Raising the estimate for the long-run neutral policy rate to 3.75 or 4.00 percent and avoiding dovish rate-cut projections for 2026 will effectively signal to markets that policy will not become ultra-loose anytime soon.
https://www.ft.com/content/175aa1d7-beff-48bc-821d-038c2936760b
A cautious rate cut this week would maintain the US central bank’s flexibility.
My recommendation:
A potentially K-shaped economy creates dilemmas for the Fed
https://thehill.com/opinion/finance/5499218-ai-revolution-job-market
Given the balance of risks, the Fed will likely cut rates by 50 or 75 basis points before the end of 2025. However, it needs to balance short-run pressing demands with potential long-term threats to its credibility. Raising the estimate for the long-run neutral policy rate to 3.75 or 4.00 percent and avoiding dovish rate-cut projections for 2026 will effectively signal to markets that policy will not become ultra-loose anytime soon.