The latest data, and still-accommodative financial conditions, suggest the Fed does not have to cut rates aggressively.
We can see the meaningful risk of a recession starting as soon as 2020.
We continue to forecast no let-up from the Fed’s quarter-point-per-quarter tightening pace any time soon.
The possible need for policy to get restrictive, not just neutral, is likely to become a regular talking point for Fed officials in the months ahead.
There is no way to know the precise level, and it can change over time.
HFE’s Chief U.S. Economist Jim O’Sullivan answers questions about the outlook for wages, inflation and Fed tightening this year and next.