🔥Breaking Fed's gov Milan says : Urgency for Aggressive 50 bps Cut Has "Diminished"🔥
Odaily Planet Daily reports :Federal Reserve Governor Lisa Milan delivered a nuanced policy update, walking back his earlier push for an aggressive half-point cut but reinforcing the longer-term dovish path.
Less Urgency: Milan stated the need for his previously advocated 50-basis-point rate cut has "diminished" following recent policy adjustments.
New Neutral Rate: He emphasized the neutral interest rate (R-star) has "clearly shifted downward" structurally. If policy rates don't fall to reflect this, it could increase recession risk.
Data Caveats: Acknowledged that some odd inflation signals were distorted by the government shutdown, suggesting current data may overstate underlying pressures.
Market Implication:
This signals the Fed's immediate easing pace may slow (no 50 bps moves), but the long-term direction remains down. The focus is on a gradual glide path toward a newly perceived, lower neutral rate to avoid stifling the economy.
Is the Fed's new game about finding a "lower neutral rate"?
