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Fed Official Milan: Can Cut Rates by 50 Basis Points in a Short Time
Summary: According to reports from FXStreet, Federal Reserve Board member Milan stated that if interest rates are not lowered quickly, the Fed will face the risk of economic damage. He believes that the current policy rate of the Fed is highly restrictive, ranging from 4% to 4.25%, far above his estimate of the so-called neutral level. ...
According to reports from FXStreet, Federal Reserve Board member Milan stated that if interest rates are not lowered quickly, the Fed will face the risk of economic damage. He believes that the current policy rate of the Fed is highly restrictive, ranging from 4% to 4.25%, far above his estimate of the so-called neutral level. Milan stated that this is why it is so important to adjust rates more quickly rather than slowly. When monetary policy is in a restrictive position, the economy is more vulnerable to downward shocks. In my view, there really is no need to take this risk. He said: My point of view is that we can cut rates by 50 basis points in a very short time, then readjust monetary policy, and once we reach our target, we will act more cautiously.
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Link: Fed Official Milan: Can Cut Rates by 50 Basis Points in a Short Time [Copy]