- Rising risks to growth have convinced a large number (eight out on seventeen) of FOMC members that rate cuts are needed by the end of the year.
- The macro forecasts have not changed significantly, showing that accommodation is meant to avoid tail risks to the economy. Inflation is expected to go back to 2% at a slower pace.
- We confirm our view of a 50 bps reduction by the end of the year, with the fist cut in July. Risks are tilted towards a more aggressive move.
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CUTS IN 2019