BlockBeats news, on December 20, Deutsche Bank released a report on this week's FOMC meeting, stating that the Federal Reserve meeting reinforced its core view that a skip (rate cut) in January may turn into an extended pause (rate cut) in 2025.
Deutsche Bank continues to believe that the nominal neutral interest rate is around 3.75%, and the committee needs to maintain a restrictive stance relative to that level. Therefore, the report assesses that the federal funds rate may remain above 4% next year, with the baseline scenario being no further rate cuts.
The report also pointed out that some Federal Reserve participants have begun to incorporate the potential economic impacts of President-elect Trump's policies into their forecasts, which may lead to higher inflation predictions for 2025 and 2026. Regarding the labor market, Powell described it as solid but noted that the current level of job creation is below what is needed to maintain a stable unemployment rate. (Golden Ten)