Economist Tom Porcelli: Even with a 100 basis point rate cut, the Fed's policy is still tight

Tom Porcelli, Chief U.S. Economist for PGIM Fixed Income, stated that the current federal fund rate of 5.3% is relatively high compared to the current consumer price inflation rate of less than 3%. Even if interest rates are cut by 100 basis points, the Fed's policy will still be relatively tight. The policy is calibrated based on significantly higher inflation rates and significantly lower unemployment rates, but these circumstances have changed.