Markets strengthened bets the Fed would deliver a quarter-point rate cut at next month’s policy meeting after data showed consumer price inflation edged down to 2.4 per cent in September
Slowly cooling inflation and a U.S. job market that remains strong but at risk of deteriorating give a green light for more interest-rate cuts in coming months, likely at a gradual pace, Fed eral Reserve policy-makers indicated in remarks on Thursday that mirrored views of financial markets.
“The vast majority believes that over the next 12 to 18 months, conditions continue to slowly and gradually improve to something like target, and rates gradually come down a fair amount to something well below where they are today,” he said. The short-term benchmark rate is now in the 4.75 per cent-5.00 per cent range. On Thursday traders added to bets the Fed will deliver a quarter-percentage-point interest-rate cut next month and continue to lower the policy rate gradually until it gets to 3.5 per cent, or possibly lower, by late next year.
Fed Inflation Policy Something Rate Pace Meeting Austan Goolsbee Binghamton University Mary Daly
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