Westpac point out that while major downward revisions to US payrolls estimates have injected a little more urgency into the US situation over the last month, the pricing in of close to 250bps in cuts by this time next year in extreme:
- that sort of ‘shock and awe’ easing does not seem warranted
WPAC is looking for easing to be a bit more orderly, nominating 200bps of cuts:
- US labour market may be weaker than it appeared but the data suggests it is far from capitulating
- Markets are clearly struggling to work out what the policy path looks like for a central bank that is no longer fearful of inflation but still not overly concerned about weak growth
Ferd funds this century, so far.