In a client note Deutsche Bank is cautioning against expectations for significant rate cuts by the Federal Reserve, citing robust economic growth and persistent inflationary pressures.
While the bank’s baseline scenario envisions a 25-basis-point rate cut in December, it notes this is a “close call” and far from certain.
Beyond that, Deutsche Bank anticipates an extended pause in monetary easing, with the federal funds rate remaining above 4% through 2026.
This outlook suggests the Fed will maintain a cautious approach, balancing the need to support economic growth while ensuring inflation does not resurge. Investors banking on rapid rate reductions may need to adjust their expectations.
This article was written by Eamonn Sheridan at www.forexlive.com.
