ABN Amro analysts update their Federal Reserve (Fed) monetary policy outlook following the latest inflation data.
A total of three cuts of 25 bp are expected in 2024
“We now expect the Fed to begin cutting rates in July (previously in June), with a pause in September, and a total of three 25bp cuts planned in 2024 (previously five). Rates are expected to fall to estimated neutral level of 3% in November 2025.”
“We don't think the Fed will stick to changing policy in quarterly forecast months, and we don't think the timing of the election is a significant factor either. Our view of the ECB remains unchanged; a much sharper move from the Fed would be needed. Euro to affect ECB cuts.” Rate Forecast Update: The Fed's change of heart raises our short-term yield forecasts for the US, but long-term yield forecasts are much less affected. “Our Euro rate forecasts remain virtually unchanged.”
Source: Fx Street
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