Former New York Fed President Dudley: The Fed will cut interest rates by 50 basis points
Former New York Fed President Dudley wrote in a recent article that the Fed's aggressive 50 basis point rate cut makes sense. The two goals of the Fed's dual mandate (price stability and maximum employment) have become more balanced, indicating that monetary policy should be neutral, neither inhibiting nor promoting economic activity. However, short-term interest rates are still far above the neutral level. This difference needs to be corrected as soon as possible. A 50 basis point rate cut would also align with the Fed's dot plot expectations. The market expects a total rate cut of at least 100 basis points by the end of 2024. If the Fed only cuts rates by 25 basis points now and expects a 50 basis point cut later this year, it would send a hawkish signal, raising market concerns about why a 50 basis point cut wasn't made from the start. A 50 basis point rate cut in September would help the Fed get out of this dilemma
Jinshi Data, September 18th news, former New York Fed Chairman Dudley wrote in his recent article that the Fed's aggressive 50 basis point rate cut is meaningful. The two goals of the Fed's dual mandate (price stability and maximum employment) have become more balanced, indicating that monetary policy should be neutral, neither suppressing nor promoting economic activity. However, short-term interest rates are still far above neutral levels. This difference needs to be corrected as soon as possible. A 50 basis point rate cut would also be in line with the Fed's dot plot expectations. The market expects a total rate cut of at least 100 basis points by the end of 2024. If the Fed only cuts rates by 25 basis points now and expects a 50 basis point cut later this year, it would send a hawkish signal, raising market concerns about why it didn't cut rates by 50 basis points from the start. A 50 basis point rate cut in September would help the Fed get out of this dilemma