Fed's Musalem pushes warning on additional lowering rates of interest

• Final month’s resolution to chop charges was a “shut name”
• The financial outlook now could be a lot totally different from when the Fed began chopping charges final yr
• The chance that inflation may get caught between 2.5% and three% has elevated

This matches up with their present coverage stance as they’re set to pause on chopping charges, arguably all via Q1 this yr. As issues stand, market gamers are pricing within the first full 25 bps charge reduce to be in June subsequent with ~42 bps of charge cuts priced in for the yr. We’ll see how that adjustments up after the US jobs report later right this moment.

This text was written by Justin Low at www.ubaidahsan.com.



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