Fed's Rate Cut Cycle: What to Expect After September

Market Overview Analysis by James Picerno covering: . Read James Picerno's latest article on Investing.com

The Federal Reserve is widely expected to start cutting interest rates at the Sep. 18 FOMC meeting, but the debate is turning to how far the central bank will trim its policy rate once the easing begins? A key part of the answer will be determined by how much the neutral rate has increased, if at all, in recent years.

But estimating the neutral rate is tricky and there are wide-ranging debates about the best approach. Not surprisingly, estimates vary, in some cases widely. The stakes are high in this technical debate for the future path of monetary policy. If the neutral rate has increased, that will probably limit how much the Fed can cut.

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