The Fed has almost lost patience: dots show strong support for cuts in 2019

The Fed is taking very seriously the increasing risks to growth, and acknowledges that the crosscurrents the economy is facing are stronger and more persistent than what previously thought; therefore, a strong response may be needed. 

Highlights:

  • Rising risks to growth have convinced a large number (eight out on seventeen) of FOMC members that rate cuts are needed by the end of the year.
  • The macro forecasts have not changed significantly, showing that accommodation is meant to avoid tail risks to the economy. Inflation is expected to go back to 2% at a slower pace.
  • We confirm our view of a 50 bps reduction by the end of the year, with the fist cut in July. Risks are tilted towards a more aggressive move.

Download the full publication below

THE FED HAS ALMOST LOST PATIENCE: DOTS SHOW STRONG SUPPORT FOR
CUTS IN 2019

RELATED INSIGHTS

GLOBAL VIEW – ENJOY SUMMER WHILE IT LASTS
As lockdowns have been lifted and global activity rebounded from the Q2 nadir, hopes of a strong recovery have helped risk assets advance further over July.
Generali Investments among preferred asset managers brands in Europe
Listen to the dedicated Podcast by Vincent Chaigneau, Head of Research, on our view on the economic recovery, new behaviours in the aftermath of the pandemic and the unique opportunities for a European fiscal and political integration.
PODCAST:
LIFE AFTER COVID -
THE LDI VIEW
Listen to the dedicated Podcast by Vincent Chaigneau, Head of Research, on our view on the economic recovery, new behaviours in the aftermath of the pandemic and the unique opportunities for a European fiscal and political integration.