Taylor Rule signals aggressive rate cuts
By Cees Bruggemans, FNB
Estimating where interest rates should be:
According to Taylor’s Rule, the Prime Interest Rate should currently be:
Financial markets today are discounting even lower rates later on this year, which isn’t unrealistic according to
But it will be up to the SARB to make the final call on the risks facing us, especially externally on capital flows and the currency, and position accordingly.
At least nobody seems to be expecting interest rate pausing, never mind interest rate increases soon.
Source: Cees Bruggemans, FNB, March 2, 2009
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