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furrypurpledinosaur t1_jacrq05 wrote

You can see that Taylor rule overshot to the downside by a lot so it makes sense it overshoots to the upside. Fed rate will not go that high.

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x___tal t1_jae311z wrote

Maybe it's the fed rates that overshoot because they are regards like us?

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MrSamsonite t1_jae60uc wrote

Sure, but when it overshot the downside, it immediately corrected itself. If your logic is correct, wouldn't we have expected the Taylor Rule to shoot back down already?

Obviously I don't expect a 10% rate, but those two lines converging around 7% seems reasonable and horrifying.

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furrypurpledinosaur t1_jaeipuk wrote

Not yet, I think inflation is still high but the amount of disinflation already in the pipeline is eventually going to show up in numbers and once it starts going down it goes down fast. That's only my opinion obviously, I don't know what will end up happening.

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