National Australia Bank outlook for the US Federal Reserve, in brief:
US economy remains resilientsubstantial progress made in reducing inflation, well anchored inflation expectations and a better supply and demand balance (particularly in the labour market) means less restrictive interest rate settings are needed Fed is expected to cut rates (and our central case is for 25bp cuts per meeting until rates return to neutral)stronger than expected employment and inflation data for September have tempered market expectations about how quickly this may occur and raised the possibility of the Fed pausing in the near terminflation remains high and that if it does not come down as expected, central banks will need to maintain restrictive policy settings in place for longer
This article was written by Eamonn Sheridan at www.forexlive.com.
