US: Moving towards an easing monetary policy? – Natixis

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According to Patrick Artus, analyst at Natixis, US core inflation is likely to remain stable, given the weak growth in unit labour costs and the fall in oil prices (energy prices have a small effect on core inflation).

Key Quotes

“Accordingly, we can imagine a scenario in the United States where growth slows without inflation rising, as growth is hampered by hiring difficulties, the slowdown in residential real estate and in car purchases and the rise in corporate borrowing costs.”

“This scenario would lead the Federal Reserve to ease its monetary policy: slower reduction in the size of its balance sheet, no rate hikes and possibly even rate cuts.”

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