It is a possibility: disinflation in the service sector is progressing at a very slow pace, and the disinflationary impact of goods prices is likely to fade soon.
I guess back at the September FOMC meeting they were more confident about inflation going back to the target and more concerned about the labor market. Interestingly, the new payroll report was positive and the CPI inflation report less benign. Indeed communication is already adjusting towards a more gradual approach to cutting interest rates.
I find it unlikely they wouldn't have seen the latest economic trends coming, they've been swinging between positive and negative for most of the past few months. The only real source of the pessimism in markets was the high interest rates, which I find to be the only real differentiator. They could have easily seen these series of events coming. I have a feeling this has more to do with the election than anything else. wbu?
Unless I'm mistaken, inflation is becoming structural, just like the housing shortage.
It is a possibility: disinflation in the service sector is progressing at a very slow pace, and the disinflationary impact of goods prices is likely to fade soon.
So what explains the balance of risks behind the 50bps cut?
I guess back at the September FOMC meeting they were more confident about inflation going back to the target and more concerned about the labor market. Interestingly, the new payroll report was positive and the CPI inflation report less benign. Indeed communication is already adjusting towards a more gradual approach to cutting interest rates.
I find it unlikely they wouldn't have seen the latest economic trends coming, they've been swinging between positive and negative for most of the past few months. The only real source of the pessimism in markets was the high interest rates, which I find to be the only real differentiator. They could have easily seen these series of events coming. I have a feeling this has more to do with the election than anything else. wbu?