Central Banks
OECD Sees Fed, ECB Keeping Tight Policy Longer Than Market View
- Chief economist says that American consumers remain strong
- Lombardelli expects inflation to come down slowly in euro area
Clare Lombardelli
Photographer: Olivia Harris/BloombergThis article is for subscribers only.
The Federal Reserve and the European Central Bank will need to keep interest rates high for longer than investors expect to ensure inflation is weeded out of their economies, OECD Chief Economist Clare Lombardelli told Bloomberg Television.
The Paris-based organization said in its economic outlook that rate cuts will only begin in the US in the second half of 2024, and not until the spring of 2025 in the euro area. That contrasts starkly with the expectations of markets, which are currently pricing the Fed and the ECB to ease policy as soon as the first half of next year.