Even 50-bps rate cut today also leaves the Fed behind the curve, it can catch up with aggressive easing in the future if it needs to.
If you look at market pricing of rate policy this year, you will see that it projects that the ECB will start to reduce rates a little later than the Fed and cut rates...
We often talk of central banks being behind the curve because they are seemingly too slow to recognise an inflation threat and end up hiking policy rates too late.
If we go back in history, there are lots of examples of policymakers that have been accused of acting too slowly on inflation; of being "behind the curve". The same...
A big issue for bond and currency markets is the extent to which central banks fall behind the curve as they look to respond to rising inflation.
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