BlockBeats news, August 20, Deutsche Bank interest rate strategists stated that U.S. Treasury Secretary Basant's view that the Federal Reserve's interest rates are more than one percentage point higher than what the models indicate is incorrect. Basant previously stated that 'whatever the model,' suggests that interest rates 'should be 150 to 175 basis points lower.' However, the search for models that support this statement has consistently yielded no results, and a team of Deutsche Bank strategists led by Matthew Raskin has recently joined this verification effort.
Raskin, a former Federal Reserve economist and advisor, and his team stated in a report on Tuesday that the rules used by the Federal Reserve in its semi-annual monetary policy report 'do not explicitly point to a need for rate cuts, let alone a cut of 150 to 175 basis points.'
They noted: 'It should be pointed out that the current federal funds rate is exactly within the relatively narrow range set by the rules,' which is roughly between 4% and 4.65%, indicating that a 25 basis point cut 'could be reasonable.' (Jin Ten)
