Odd Lots This Is What The Rate Cut Cycle Could Look Like
18 snips
Aug 27, 2024 
Peter Williams, Managing Director of Macro Research and Central Bank Policy at 22V Research, shares his insights on the impending rate cut cycle. He unpacks Fed Chairman Jerome Powell's recent signals and discusses possible cut sizes. The conversation dives into how decreasing inflation, paired with stable employment, affects labor market health. Williams also explores the nuance of R-Star and its relevance in shaping interest rate policy amidst ongoing economic uncertainties.
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Rate Cut Predictions
- The Federal Reserve is likely to cut rates in September, November, and December 2023.
- This front-loading approach reflects a risk management mode, prioritizing downside protection.
Rate Cut Cycle History
- Past rate cut cycles fall into two categories: mid-cycle corrections and recessionary cuts.
- The current situation differs due to higher long-run interest rate assumptions.
Shift in Fed Sentiment
- Recent statements from Fed officials reveal a rapid shift in sentiment regarding rate cuts.
- Bostic's change in stance, from needing more data to considering a 50 bps cut, highlights this shift.