Fed on course to begin lowering rates at the June FOMC meeting – ABN Amro
|The FOMC has kept rates on hold since its last rate hike in July. Economists at ABN Amro still expect the Fed to start cutting rates from June.
Upper bound of the FFR to reach 4.25% by end-2024, and 3% by mid-2025
We expect the Fed to start cutting rates in June, with the risk somewhat tilted to earlier cuts.
Even with rate cuts starting next year, monetary policy is expected to remain restrictive throughout 2024 and even into 2025.
We expect the upper bound of the fed funds rate to reach 4.25% by end-2024, and 3% by mid-2025.
The Fed also looks set to wind down its quantitative tightening somewhat sooner than previously expected, though this will be well-telegraphed and gradual.
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