- As expected the Fed cut rates by 25 bps. However, the subsiding of political risks has convinced the Fed to pause easying.
- The moderate growth outlook is confirmed as well as that of inflation very gradually converging to the 2% target. The (tentative) softening in global uncertainty has reduced the downside risks to this outlook, which motivated the series of rates cuts.
- After this hawkish twist, the cut we penciled in for December is likely be moved into Q1 2020, as we expect by then a more pronounced slowdown of the economy.