ResearchDeutsche BankAmy Yang | (+1) 212 250 9959 | amy.yang@db.comFebruary 12, 2024IMPORTANT RESEARCH DISCLOSURES AND ANALYST CERTIFICATIONS LOCATED IN APPENDIX 1. MCI (P) 041/10/2023. UNTIL 19th MARCH 2021 INCOMPLETEDISCLOSURE INFORMATION MAY HAVE BEEN DISPLAYED, PLEASE SEE APPENDIX 1 FOR FURTHER DETAILS.Fed Watcher: Not itching for an imminent cutDeutsche BankResearchAmy YangEconomist(+1) 212 250 9959 | amy.yang@db.comMatthew LuzzettiChief US Economist(+1) 212 250 6161 | matthew.luzzetti@db.comBrett RyanSenior Economist(+1) 212 250 6294 | brett.ryan@db.comJustin WeidnerEconomist(+1) 212 469 1679 | justin-s.weidner@db.com Avik ChattopadhyayResearch Associateavik-a.chattopadhyay@db.comFebruary 12, 2024Distributed on: 12/02/2024 19:50:07 GMT7T2se3r0Ot6kwoPaResearchDeutsche BankAmy Yang | (+1) 212 250 9959 | amy.yang@db.comFebruary 12, 2024DB Fed Watcher: Not itching for an imminent cut2FedspeakWho**TakeawaysBias*Powell [3](02/04)▪ Fed unlikely to have the confidence for a March cut▪ FOMC rate forecasts likely not changed much since December▪ Not yet prepared to say US has pulled off soft landing▪ Labor market is still very healthy▪ Premature cuts can risk inflation settling above 2%▪ Making good progress but job is not doneBowman [5] (02/12)▪ Not seeing cuts in ‘immediate future’ as many risks remain▪ Current policy is ‘in the right place’Kashkari [4](02/05,06,07,12)▪ Sees 2-3 cuts in ‘24 as appropriate▪ Higher neutral allows the time to cuts and assess data; policy not too tight; ‘not yet there’ on inflation▪ No need to rush on rates as they are not holding down growth much▪ Need few more months of good price data to be confident▪ Labor market will help determine speed of cutsBarkin [3](02/07,08,12)▪ Want sustained, broadening disinflation before cutting rates▪ Inflation going back to 2% amid strong demand would signal higher neutral rate; conceivable neutral rate has risen post-pandemic▪ Cautious of Jan job numbers due to size of seasonalsFedspeak, continued Who**TakeawaysBias*Kugler [3](02/07)▪ Rate cuts ‘at some point’ with continued progress on inflation and labor market; If disinflation stalled, keep rates higher for longer▪ Every Fed meeting is a live meeting▪ Much uncertainty around neutral rate▪ Policy path will depend on inflation▪ Fin. conditions still relatively tight ▪ Individual price adjustment frequency of firms is likely to contribute to continued disinflationGoolsbee [1](02/02,05)▪ Doesn’t want to rule out March cut▪ Need to see more inflation progress before rate cutsCollins [2](02/07)▪ See rate cuts ‘later this year’; need more data to support a cut; cuts to be ‘gradual & methodical’▪ Policy well positioned. Sustained, broadening signs of progress should provide the necessary confidence▪ Path towards 2% inflation could be ‘uneven and bumpy’▪ R* possibly has increased▪ Reasonable chance rates settle higher vs. p...
