Cohn, speaking with CNBC’s Dan Murphy, emphasized the need for the Federal Reserve to maintain its current interest rate levels, which have hovered between 5.25% and 5.5% since September, to stay in step with other central banks’ unwinding strategies. He suggested that the Fed would likely await signals of an economic downturn before considering any action on rates.
The persistence of October’s inflation rate at 3.2%, unchanged from the previous month and significantly reduced from the June 2022 peak of over 9%, indicates that the U.S. economy may be on course for a “soft landing,” dispelling some concerns over a potential recession. This stability is seen despite aggressive measures taken to curb inflation and soaring consumer debt levels, which have surpassed $1 trillion.
Cohn also highlighted the return to average economic benchmarks, with Treasury yields nearing their hundred-year average of around 4.5% and inflation trending towards its historical norm of 2-2.5%. These indicators, he suggests, point to an overarching return to economic steadiness after a prolonged era of quantitative easing and near-zero interest rates.
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Source: Economy - investing.com
