Read previewThe Federal Reserve is expected to slash interest rates today for the first time since 2020 as the labor market and inflation continue to cool.
AdvertisementAssuming a 25-basis-point cut at every FOMC meeting until next July, that would leave an extra 75 basis points the central bank would have to work into its policy adjustments over that time.
One is that the consumer could be weaker than they appear, and the labor market is likely to deteriorate further.
AdvertisementWhile the Fed hopes to stimulate spending with rate cuts, Tombs is skeptical that they'll the impact the central bank wants.
Advertisement"New mortgage rates need to drop by about 250bp before they will undershoot the average outstanding mortgage rate," Tombs wrote.
Persons:
—, Jerome Powell's, Samuel Tombs, Tombs
Organizations:
Service, Business, Macroeconomics
Locations:
Jackson Hole , Wyoming