Powell’s Own Guide to Recessions Shows Rate Cuts Are Coming
- Gap between current, future short-term rate widens further
- Fed will commence rate cuts at the December meeting: TD Sec.
This article is for subscribers only.
A recession is certain and so are rate cuts this year. That’s the message from the bond market metric Federal Reserve Chairman Jerome Powell highlighted a year ago as the best guide to tip-off economic troubles in the US.
The expected three-month T-bill rate in 18 months’ time dropped to 134 basis points under the current rate. That’s below the previous record nadir it hit in January 2001 — about two months before the US economy fell into recession.