Another Fed Rate Cut on the Way

Another Fed Rate Cut on the Way. In our opinion, this rate cut is completely unnecessary.  The unemployment rate is 3.5%, much lower than the 4.2% that Fed policymakers think it will average over the long run.  Nominal GDP – real GDP growth plus inflation – is up 5.0% annualized in the past two years, well above the level of short-term rates.  The M2 measure of the money supply is up 6.5% from a year ago, a healthy acceleration from the 3.4% increase the year before.