Fed’s Logan: Expects gradual cuts if the economy meets forecasts

Comments from Logan:

• Fed will need to be nimble with mon pol choices
• Economy is strong and stable
• Sees downside risk to job market, ongoing risks to inflation goal
• Balance sheet cuts and rate cuts working in same direction
• Liquidity still abundant in money markets
• Over time wants ‘negligible’ balances in reverse repo facility
• Fed could change reverse repo rate if cash doesn’t leave facility

The Fed has set a benchmark on easing that pegs to top of the tolerable unemployment range at 4.4-4.5% so that’s the marker on when there will be more/less easing than the gradual slide to 3.50% that’s priced in.

This article was written by Adam Button at www.forexlive.com.