Fed's Kugler Says Policy Is Restrictive; With Disinflation, We Need To Cut Even Just Keep Where We Are In Terms Of Restrictiveness; We Have A Resilient Labor Market, We Don't Want Demand To Fall Further When It's Not Necessary; Makes Sense To Cut Rates To Remove Some Restrictiveness; We Are Way Above Any Estimates Of Neutral
Portfolio Pulse from Benzinga Newsdesk
Federal Reserve's Kugler suggests that current monetary policy is too restrictive and advocates for rate cuts to alleviate this. Despite a resilient labor market, there's a need to prevent unnecessary demand reduction. Current rates are significantly above neutral estimates.
September 25, 2024 | 9:03 pm
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POSITIVE IMPACT
The SPDR S&P 500 ETF (SPY) may be impacted by potential rate cuts as suggested by Fed's Kugler. Rate cuts could boost equity markets by reducing borrowing costs and encouraging investment.
Rate cuts generally lead to lower borrowing costs, which can stimulate economic activity and boost stock markets. SPY, as a broad market ETF, would likely benefit from such a policy shift.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80