Before the Fed’s decision, bond market traders were pricing in 58% odds of a 50 basis point rate cut, and 42% odds of a 25 basis point rate cut, according to CME Group’s FedWatch Tool. “It is time to recalibrate our policy to something that is more appropriate given the progress...
which means the Fed can change course from previous projections. It's also worth noting that Fed members' predictions on rate cuts are for next year as a whole, with no signals onwhenin 2024 they expect the first cut to be implemented....
The Bank of Japan (BOJ) left interest rates unchanged last week and indicated it was not in a hurry to hike them again. That decision, coming just days after the Fed’s 50 basis points rate cut, put a pause to the yen’s sharp gains this month. The currency is up 1.4% in Septembe...
And finally, note that in Federal Reserve Chairman Ben Bernanke’s most recent speech, he explicitly relies on the Taylor rule as evidence that the Fed Funds rate was not too low during the run-up to the housing boom. That same rule posits that the Fed Funds rate should hold at zero. ...
If you were looking for a final, cataclysmic collapse of the US economy, you remain disappointed. To be sure, the fallout from the financial crisis is severe, with the palpable wreckage evident in the bottom line, a rate of underemployment at 17.2%. Yet