Central Banks


  • Expects GDP growth of 1% or 1.5% for the year
  • We have a path forward to bring inflation down
  • There are some downside risks from abroad
  • Interest-rate sensitive sectors of the economy are slowing, like housing
  • Economy is strong, financial conditions have tightened
  • Expects economy to slow to a point where unemployment rises to 4% but it’s highly uncertain
  • My baseline forecast is that we need to get to moderately restrictive territory next year
  • It’s reasonable to get to 3.5-4% Fed funds rate
  • At our next meeting, 50 or 75 bps will be the debate
  • I’m not seeing any sign of a taper tantrum, the bond market is functioning. Watching very closely

Right now the Fed funds curve peaks at 3.60% in March of 2023. There’s nothing from this interview that changes the outlook.

This article was written by Adam Button at www.forexlive.com.



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