TechFlow news: Federal Reserve's Harker said we should maintain a restrictive stance for some time. Labor productivity shows an upward trend.
Credit conditions have clearly tightened, and it's unclear how much this will impact the economy. We are monitoring the rise in market yields. Higher Treasury yields help cool down the economy. Consumption growth among low-income consumers has noticeably slowed.
At this point, the Fed may have already done enough on policy—we're seeing inflation come down. Policy remains in restrictive territory, and balance sheet reduction is ongoing while accommodative measures diminish. Unemployment is expected to rise to 4% or slightly above. There's evidence that labor market tightness has eased somewhat, especially in the services sector.
I don't believe AI technology will disrupt the economy. U.S. inflation next year will reach 3%, with growth stabilizing.
I think we will hold interest rates steady this year; if inflation declines, we might cut rates next year. Rate decisions next year will be data-dependent. The Fed needs to see clear signs of lower inflation before cutting. I can't predict when the Fed will cut rates. If inflation falls faster, cuts could come earlier.
