As Fed members see risk of higher neutral rate, MRB warns of fewer cuts next year
Investing.com -- The Fed is likely to rein in its forecast for rate cuts next year as Fed members are teeing up the idea of a higher neutral rate pointing to much shallower rate-cut cycle, MRB Partners said in a recent note.
But following a slew of positive economic data and the risk that progress against curbing inflation could be slowing, some Fed members have suggested the neutral rate -- one that neither stimulus nor weighs on economic growth -- could be higher and expressed cautioned on the rate-cut outlook ahead. This is sharp contrast to the Fed's s current estimate of the neutral rate, at 2.9%, which is"clearly too low," the strategists said.
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