- Most participants saws some reduction in Fed funds rate this year
- ‘Some’ participants said the most-likely appropriate path would involve no rate cuts in 2025
- Those participants cited recent elevated inflation readings, elevated inflation expectations and economic resilience
- Several participants said Fed funds might not be far above neutral
- Fed staff saw higher real GDP growth for 2025 than in previous forecast, also saw lower inflation
There is no mystery who the ‘couple’ is — Waller and Bowman. The news here is that there is no one else joining them and that they were outnumber by those who don’t see any cuts at all. That doesn’t mean the market is wrong to price in 63 bps in easing this year because there is a tendency for officials to be overly-hawkish until the bad news hits; but we may be overindexing for Waller/Bowman.
This article was written by Adam Button at www.forexlive.com.
