- Last month’s decision to cut rates was a “close call”
- The economic outlook now is much different from when the Fed started cutting rates last year
- The risk that inflation might get stuck between 2.5% and 3% has increased
This matches up with their current policy stance as they are set to pause on cutting rates, arguably all through Q1 this year. As things stand, market players are pricing in the first full 25 bps rate cut to be in June next with ~42 bps of rate cuts priced in for the year. We’ll see how that changes up after the US jobs report later today.
This article was written by Justin Low at www.forexlive.com.
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