What do the monetary rules say about rate-cut expectations?

Fed Governor Christopher Waller has fuelled expectations of policy rate cuts this week. With inflation falling, the monetary rules setting the optimal policy are beginning to tilt towards easing. But inflation must continue to fall. Not all Fed members are convinced of this yet. A few months of data will be needed to provide a clearer picture. In a soft landing scenario, the rate cut is likely to be gradual. To date, the markets are forecasting -125bp by the end of 2024, with the...