PREVIOUS TRADING DAY EVENTS 10 April 2023

Announcements 

In its latest World Economic Report, the IMF argued that when inflation is beaten the rates shall revert to the low levels that were dominant prior to the COVID crisis. It is the socalled natural or neutral rate the inflationadjusted shortterm rate which is presented to be below 1 in the U.S. in the longterm future. The Funds neutral rate estimate is in line with the Fed policymakers rate.

The former U.S. Treasury Secretary Lawrence Summers disagrees with the IMF. He suggested last month that the real neutral interest rate is probably in the range of 1.5 to 2.

The low level of neutral rates will limit the ability of the Fed and other central banks to stimulate their economies going forward, the IMF said.

The effective lower bound on interest rates may become binding again as monetary policymakers are forced to cut rates to about zero to handle future economic downturns, IMF said.

Source httpswww.bloomberg.comnewsarticles20230410imfdisagreeswithsummersoverwhereinterestrateswillsettle?srndeconomicsv2

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