In advance of the Federal Reserve’s September meeting, Marty Green spoke with Robbie Chrisman of The Chrisman Commentary on where he thinks interest rates will go – if anywhere – in the coming year, and the potential ‘bitter end’ to inflation.
“The ‘bitter end’ means how long the rates will stay at the level they are at rather than how high they will go, because I tend to agree that they are close to their terminal rate now.” said Green. “However, the real ‘bitter end’ is how long rates will stay elevated by the Fed to make sure they’ve won the inflation battle.”
Green added: “The leap was misread by the market, and the reality is that the Fed will keep the rates there well into 2024. They do not see a need to reduce them. I think the Fed will keep the rates elevated until the middle of next year at the soonest, and it may even be longer than that. They will gradually get back to 2% inflation, but their own prognosis shows that the Fed does not think they will get there this year or next year, and it probably will be 2025 when they arrive back at 2%.”
Listen to Green’s full interview with The Chrisman Commentary here.