Deutsche Bank: Fed will not cut interest rates next year

Odaily Odaily News: Deutsche Bank released a report on this week's FOMC meeting, stating that the Fed meeting reinforced our fundamental view that the skip (rate cut) at the January meeting may turn into an extended pause (rate cut) in 2025. We continue to believe that the nominal neutral interest rate is around 3.75%, and it is necessary for the committee to remain restrictive relative to that level. Therefore, we reiterate our view that the federal funds rate is likely to remain above 4% next year, and the base case is no further rate cuts. The report also noted that some Fed participants have begun to incorporate the potential economic impact of President-elect Trump's policies into their forecasts, which could lead to higher inflation forecasts for 2025 and 2026. In terms of the labor market, Powell described it as solid, but noted that the current level of job creation is below that required to maintain a stable unemployment rate.