The unemployment rate will not exceed 5%

Philadelphia Federal Reserve Bank (Fed) Patrick Harker made headlines on Friday by saying the Fed’s interest rate actions must be “methodical,” telegraphing that policymakers are targeting a series of cuts through the rest of 2024 while the bank US headquarters is getting ready. for a dovish pivot.

Key highlights

We need to start reducing rates.

The Fed should begin the tapering process and continue.

I don’t see a big risk of damage to the workforce. In our view, the unemployment rate will not peak above 5%.

Contacts urge Fed not to stop and start rate cuts.

The neutral rate is somewhere around 3%.