jokerswildpoker| Deutsche Bank has turned sharply, and now thinks the Fed will cut interest rates only once this year and delay until December

Deutsche Bank changed its mind after the US consumer price index exceeded expectations for three months in a row and joined Wall Street's growing postponement of interest rate cuts.

Us economists at the bank, led by Matthew Luzzetti, now expect the Fed to loosen policy only once this year and will not do so until December. The shift is almost subversive: Deutsche Bank even thought earlier this month that the Fed would cut interest rates by 25 basis points four times this year.

But similar adjustments are no surprise on wall street, as Wednesday's roaring inflation data added to the belief of many forecasters that the fed would not relax until it saw the CPI fall further towards its annual target of 2%. Treasury yields rose sharply on top of other data that had previously shown a strong economy, and futures traders began to doubt whether the Fed would cut interest rates twice this year.

Luzzetti andJokerswildpokerHis team described in a report on ThursdayJokerswildpokerTheir mental journey: "recent developments, particularly upward inflation reports, solid labour market data and relaxed financial conditions, have clearly undermined the case for interest rate cuts."

Deutsche Bank had previously insisted that the Fed needed to see the core personal consumption expenditure price index, a key indicator of inflation, weaken in the coming months to gain the confidence needed to ease monetary policy.

Now the bank's forecast is that the above indicators will reach 0 in March and April.Jokerswildpoker.3%, which is so high that people are more worried about inflation. "if these figures come true, then inflation data alone are unlikely to justify the rate cut at the July meeting," the economists wrote.

Looking beyond this year, Luzzetti and his economic team now expect the Fed to cut interest rates twice in the first half of 2025 and then stay put until 2026.

Even so, they say, there is a risk of fewer interest rate cuts, especially given the uncertainty of the U. S. presidential election.

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